Having failed in court to block a takeover by a big French bank, angry shareholders at Fortis, once Belgium’s biggest bank, tried to vote with their feet on Tuesday — or, more precisely, their shoes.
At an often-chaotic general meeting in Ghent on whether to sell the down-at-the-heels Belgian company to BNP Paribas, Fortis shareholders scuffled with management, pelting them with shoes and coins and twice bringing proceedings to a halt, The New York Times’s David Jolly reported.
But the Fortis chairman, Jozef De Mey, pressed ahead and the proposal passed with 72.99 percent backing, clearing the way for a final vote Wednesday by Dutch shareholders, more than six months after the deal was mooted.
To call it contentious would be a serious understatement. It brought down one government in Belgium and was rejected twice by shareholders, who charge they are being sold short by politicians anxious to be rid of the money-losing bank. Fortis last month reported a 2008 net loss of 28 billion euros, or $37 billion.
Fortis, with a dual ownership structure in the Netherlands and Belgium, was once the pride of the Belgian financial establishment, its blue-chip shares widely held by local investors.
But it was ultimately undone by the debt it took on in 2007 at the height of the credit bubble, when it joined Royal Bank of Scotland and Banco Santander in acquiring the Dutch bank ABN Amro for 71.9 billion euros, about $94 billion at current exchange rates, the biggest banking takeover in history.
The collapse of the company in October, when it was broken up and taken over by the Dutch and Belgian governments, wiped out 95 percent of the Belgian unit’s share price. The stock was suspended Tuesday pending the vote. Shares of BNP fell 3 percent in Paris.
The Netherlands government nationalized the Dutch operations on Oct. 3, paying shareholders 17 billion euros.
The Belgian government is seeking to sell 75 percent of the banking unit to BNP Paribas, which agreed to pay in shares in a deal worth about 3.7 billion euros at BNP’s current share price. BNP would also take a 25 percent stake in Fortis Insurance for about 1.4 billion euros in cash.
The Belgian prime minister, Herman Van Rompuy, who took office after the previous government collapsed over allegations of political meddling in the deal, had warned that the bank would probably stay in government hands for years if the BNP Paribas sale did not go through. He welcomed Tuesday’s result and expressed “total confidence” that Dutch shareholders would approve it as well.
Fortis officials could not immediately be reached for comment, The Times said. A spokesman for BNP told the newspaper that the French bank would not comment before the final vote.
Shareholders had taken the initial carve-up to court last year and won the right to put it to a vote. In February, they voted it down, forcing the government and BNP Paribas to sweeten the deal.
In the latest maneuvering, some long-time shareholders wanted to block newer investors from voting, including hedge funds, who hope to turn a quick profit after snapping up shares at their recent lows. But a Belgian appeals court ruled against them on April 10, saying all shareholders of the bank could vote on the deal.
Another last-ditch legal maneuver failed late Monday, which led to Tuesday’s uproar.
“It wasn’t the vote on BNP Paribas itself,” Laurent Arnauts, an lawyer with the corporate law firm Modrikamen, which is leading battle against the deal, told The Times. “Rather it was the principle of allowing about 25 percent of the shares to be voted without a declaration of ownership.”
Speaking by phone from inside the meeting, he said that the shares in question appeared to be held anonymously in tax havens, and that he believed they were held by allies of BNP. But a judge had refused to suspend their voting rights, and management refused to put the question to the shareholders meeting Tuesday.
Fortis executives can only look ahead with dread to the second day of the shareholder vote, Wednesday, in Utrecht, the Netherlands, a country known for wooden shoes.
Thursday, April 30, 2009
Constellation Energy Gets OK For Electricite de France Sale
Boosting its hopes for a turnaround, Constellation Energy Group Inc. (NYSE:CEG) received New York regulator approval for a sale of reactors to France's Electricité de France SA, the world's largest nuclear power plant owner.
The $4.5 billion deal includes the acquisition of nearly half of Constellation Nuclear, the indirect owner of three nuclear power plants in upstate New York.
A Bizjournals report noted Maryland regulators are in the middle of a similar investigation to determine whether the deal gives EdF substantial influence over Constellation subsidiary Baltimore Gas and Electric Co., Maryland's largest electric utility. As we previously reported, Constellation CEO Mayo A. Shattuck III believes the EdF joint venture is most critical to the company's transformation. In the fourth quarter, Baltimore's Constellation posted a net loss of $1.41 billion.
Meanwhile, EdF is engaged in some other deals. It recently received approval from Chinese authorities to acquire a 35% holding in a joint venture with Chinese partners to operate two coal-burning thermal power stations in the province of Henan. On April 17, news came that Centrica plc, the U.K.'s biggest energy supplier, may sell its majority holding in a Belgian power generator to EdF.
And it was reported on Tuesday that EdF is planning a bond issue to be directed toward private individuals in France. - Baz Hiralal
The $4.5 billion deal includes the acquisition of nearly half of Constellation Nuclear, the indirect owner of three nuclear power plants in upstate New York.
A Bizjournals report noted Maryland regulators are in the middle of a similar investigation to determine whether the deal gives EdF substantial influence over Constellation subsidiary Baltimore Gas and Electric Co., Maryland's largest electric utility. As we previously reported, Constellation CEO Mayo A. Shattuck III believes the EdF joint venture is most critical to the company's transformation. In the fourth quarter, Baltimore's Constellation posted a net loss of $1.41 billion.
Meanwhile, EdF is engaged in some other deals. It recently received approval from Chinese authorities to acquire a 35% holding in a joint venture with Chinese partners to operate two coal-burning thermal power stations in the province of Henan. On April 17, news came that Centrica plc, the U.K.'s biggest energy supplier, may sell its majority holding in a Belgian power generator to EdF.
And it was reported on Tuesday that EdF is planning a bond issue to be directed toward private individuals in France. - Baz Hiralal
China Zhongwang Holdings Prices $1.3B IPO
China Zhongwang Holdings (1333.HK) priced its initial public offering at the lower end of an indicated range, according to a term sheet obtained by Reuters on Thursday, raising $1.3 billion in the world's biggest IPO so far this year.
The public offering of Asia's largest maker of aluminium extrusion products was ambitious in its size, pricing and timing, given the 94 percent drop in global IPO proceeds so far this year and the ongoing financial and economic crisis.
The offering attracted fewer retail investors than expected, but the proceeds raised were more than the $1 billion the company initially planned to raise.
The HK$7 per share IPO price values Zhongwang at around 11 times forecast 2009 profits, a relatively high multiple in the current climate.
"There are a whole lot of good stocks trading at around 10 times their earnings, so it's quite likely Zhongwang will drop further after it lists," said Patrick Shum, chief portfolio strategist with Karl Thomson Securities.
"Ten times valuation would be a good time to buy this stock."
The pricing was near the low end of an indicated HK$6.80-HK$8.80 range, as jittery retail investors were reluctant to buy shares and institutions were unwilling to buy at the high end, sources said. The sources were not authorised to speak publicly about the deal.
The IPO's Hong Kong retail tranche was undersubscribed as local individuals bought just 69 percent of the shares allocated to them, said another source with direct knowledge of the deal. Underwriters will increase the allotment of shares for institutional investors from the original 90 percent target.
"Retail investors are worried the market might fall sharply," said Kingston Lin, associate director at Prudential Brokerage Limited.
Despite concerns of a deadly flu outbreak spreading from Mexico, Asian markets are holding up, with the MSCI index of Asia-Pacific shares excluding Japan hitting a six-month peak on Thursday.
China Zhongwang sold 1.4 billion shares, or nearly 26 percent of its enlarged share capital, making it the world's largest IPO since China South Locomotive (1766.HK) (601766.SS) raised $1.57 billion last August.
HEAVY METAL
Liaoning-based Zhongwang makes two main types of products. Its industrial aluminium is used as parts and components for railway cargo, metro rails, trucks and autos. Its construction aluminium is used in the fabrication of door frames and window frames and interiors in upscale buildings.
In the IPO prospectus, Zhongwang said 2008 revenues nearly doubled to 11.3 billion yuan ($1.65 billion) mainly from the demand and higher margins of its industrial aluminium. The company's projects include a Beijing airport terminal and Beijing Olympic games venues.
Company officials and the firm's bankers marketed the deal in Asia before heading to Europe and the United States for meetings with institutional investors there.
Zhongwang has said it would use the proceeds to expand capacity and buy equipment, as well as for working capital, debt repayment and research and development.
The world's biggest listing this year was the $828 million February IPO by Mead Johnson Nutrition Co (MJN.N). Global IPO proceeds so far in 2009 plunged to $3.2 billion, compared with $51.5 billion in the year-ago period, according to Thomson Reuters data.
Zhongwang shares will trade under the 1333 (1333.HK) Hong Kong stock code and debut on May 8.
Macquarie (MQG.AX), CITIC Securities, JPMorgan (JPM.N) and UBS (UBSN.VX)(UBS.N) were the joint lead managers of the deal. CITIC Securities, JPMorgan (JPM.N) and UBS (UBSN.VX)(UBS.N) were the bookrunners
The public offering of Asia's largest maker of aluminium extrusion products was ambitious in its size, pricing and timing, given the 94 percent drop in global IPO proceeds so far this year and the ongoing financial and economic crisis.
The offering attracted fewer retail investors than expected, but the proceeds raised were more than the $1 billion the company initially planned to raise.
The HK$7 per share IPO price values Zhongwang at around 11 times forecast 2009 profits, a relatively high multiple in the current climate.
"There are a whole lot of good stocks trading at around 10 times their earnings, so it's quite likely Zhongwang will drop further after it lists," said Patrick Shum, chief portfolio strategist with Karl Thomson Securities.
"Ten times valuation would be a good time to buy this stock."
The pricing was near the low end of an indicated HK$6.80-HK$8.80 range, as jittery retail investors were reluctant to buy shares and institutions were unwilling to buy at the high end, sources said. The sources were not authorised to speak publicly about the deal.
The IPO's Hong Kong retail tranche was undersubscribed as local individuals bought just 69 percent of the shares allocated to them, said another source with direct knowledge of the deal. Underwriters will increase the allotment of shares for institutional investors from the original 90 percent target.
"Retail investors are worried the market might fall sharply," said Kingston Lin, associate director at Prudential Brokerage Limited.
Despite concerns of a deadly flu outbreak spreading from Mexico, Asian markets are holding up, with the MSCI index of Asia-Pacific shares excluding Japan hitting a six-month peak on Thursday.
China Zhongwang sold 1.4 billion shares, or nearly 26 percent of its enlarged share capital, making it the world's largest IPO since China South Locomotive (1766.HK) (601766.SS) raised $1.57 billion last August.
HEAVY METAL
Liaoning-based Zhongwang makes two main types of products. Its industrial aluminium is used as parts and components for railway cargo, metro rails, trucks and autos. Its construction aluminium is used in the fabrication of door frames and window frames and interiors in upscale buildings.
In the IPO prospectus, Zhongwang said 2008 revenues nearly doubled to 11.3 billion yuan ($1.65 billion) mainly from the demand and higher margins of its industrial aluminium. The company's projects include a Beijing airport terminal and Beijing Olympic games venues.
Company officials and the firm's bankers marketed the deal in Asia before heading to Europe and the United States for meetings with institutional investors there.
Zhongwang has said it would use the proceeds to expand capacity and buy equipment, as well as for working capital, debt repayment and research and development.
The world's biggest listing this year was the $828 million February IPO by Mead Johnson Nutrition Co (MJN.N). Global IPO proceeds so far in 2009 plunged to $3.2 billion, compared with $51.5 billion in the year-ago period, according to Thomson Reuters data.
Zhongwang shares will trade under the 1333 (1333.HK) Hong Kong stock code and debut on May 8.
Macquarie (MQG.AX), CITIC Securities, JPMorgan (JPM.N) and UBS (UBSN.VX)(UBS.N) were the joint lead managers of the deal. CITIC Securities, JPMorgan (JPM.N) and UBS (UBSN.VX)(UBS.N) were the bookrunners
Wednesday, April 29, 2009
SunPower Prices Common Share and Cvt Note Offerings
SunPower Corp. (Nasdaq: SPWRA; SPWRB), a Silicon Valley-based provider of high efficiency solar cells, solar panels, and solar systems, today announced the pricing of its public offering of 9,000,000 shares of class A common stock at $22.00 per share, and the pricing of its $200 million aggregate principal amount of 4.75% senior convertible debentures due 2014.
SunPower has also granted the underwriters an overallotment option with respect to an additional 1,350,000 shares of class A common stock and an additional $30.0 million aggregate principal amount of senior convertible debentures. The aggregate net proceeds from the sale of the debentures and the shares of class A common stock being offered are expected to be approximately $363.1 million, after deducting the underwriters' discounts and estimated offering expenses payable by the company (including the cost of certain convertible hedge and warrant transactions entered into in connection with the debenture offering), assuming the underwriters do not exercise their option to purchase additional debentures or shares of class A common stock.
The senior convertible debentures will bear interest at a rate of 4.75% per year, payable on April 15 and October 15 of each year, commencing on October 15, 2009. The debentures will mature on April 15, 2014. Holders may require the company to repurchase all or a portion of their debentures upon a fundamental change (as defined in the applicable prospectus supplement) at a cash repurchase price equal to 100% of the principal amount plus accrued and unpaid interest. SunPower may not redeem the debentures prior to the maturity date.
The senior convertible debentures are convertible into shares of SunPower's class A common stock initially at a conversion rate of approximately 37.88 shares (equivalent to an initial conversion price of $26.40 per share) per $1000 principal amount of debentures, at any time on or prior to the close of business on the business day immediately preceding the maturity date. The applicable conversion rate may adjust in certain circumstances, including upon a fundamental change. Additional details are available in the prospectus and the applicable prospectus supplement to which this communication relates, which are filed with the SEC.
The debentures will be SunPower's senior unsecured obligations and will rank equal in right of payment with all of its existing and future senior unsecured indebtedness. The debentures will be effectively subordinated to the company's secured indebtedness to the extent of the value of the related collateral and structurally subordinated to indebtedness and other liabilities of our subsidiaries.
Closing of the public offerings of shares and debentures is expected to occur on May 4, 2009. The closing of each offering is not contingent on the other.
Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are serving as joint book-running managers for the offerings. Lazard Capital Markets, Barclays Capital Inc., Piper Jaffray & Co., Wachovia Capital Markets, LLC, and SL Hare Capital, Inc. will serve as co-managers.
SunPower has also granted the underwriters an overallotment option with respect to an additional 1,350,000 shares of class A common stock and an additional $30.0 million aggregate principal amount of senior convertible debentures. The aggregate net proceeds from the sale of the debentures and the shares of class A common stock being offered are expected to be approximately $363.1 million, after deducting the underwriters' discounts and estimated offering expenses payable by the company (including the cost of certain convertible hedge and warrant transactions entered into in connection with the debenture offering), assuming the underwriters do not exercise their option to purchase additional debentures or shares of class A common stock.
The senior convertible debentures will bear interest at a rate of 4.75% per year, payable on April 15 and October 15 of each year, commencing on October 15, 2009. The debentures will mature on April 15, 2014. Holders may require the company to repurchase all or a portion of their debentures upon a fundamental change (as defined in the applicable prospectus supplement) at a cash repurchase price equal to 100% of the principal amount plus accrued and unpaid interest. SunPower may not redeem the debentures prior to the maturity date.
The senior convertible debentures are convertible into shares of SunPower's class A common stock initially at a conversion rate of approximately 37.88 shares (equivalent to an initial conversion price of $26.40 per share) per $1000 principal amount of debentures, at any time on or prior to the close of business on the business day immediately preceding the maturity date. The applicable conversion rate may adjust in certain circumstances, including upon a fundamental change. Additional details are available in the prospectus and the applicable prospectus supplement to which this communication relates, which are filed with the SEC.
The debentures will be SunPower's senior unsecured obligations and will rank equal in right of payment with all of its existing and future senior unsecured indebtedness. The debentures will be effectively subordinated to the company's secured indebtedness to the extent of the value of the related collateral and structurally subordinated to indebtedness and other liabilities of our subsidiaries.
Closing of the public offerings of shares and debentures is expected to occur on May 4, 2009. The closing of each offering is not contingent on the other.
Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are serving as joint book-running managers for the offerings. Lazard Capital Markets, Barclays Capital Inc., Piper Jaffray & Co., Wachovia Capital Markets, LLC, and SL Hare Capital, Inc. will serve as co-managers.
Orient-Express Prices $149M Equity Offering
Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), today announced the pricing of its public offering of 22,500,000 Class A common shares at a price of $5.75 per share. The Company has granted the underwriters an option to purchase up to an additional 3,375,000 shares to cover over-allotments, if any. Subject to customary conditions, the offering is expected to close on or about Monday, May 4, 2009.
The Company intends to use the net proceeds from this offering, which are expected to be approximately $123 million (without giving effect to any exercise of the underwriters' over-allotment option), primarily for debt reduction and general corporate purposes.
Deutsche Bank Securities Inc. is acting as sole bookrunner for this offering.
The Company intends to use the net proceeds from this offering, which are expected to be approximately $123 million (without giving effect to any exercise of the underwriters' over-allotment option), primarily for debt reduction and general corporate purposes.
Deutsche Bank Securities Inc. is acting as sole bookrunner for this offering.
Oilsands Quests Announces Equity Offering
Oilsands Quest Inc. (NYSE Amex: BQI) (the "Company") announced today that it has commenced a marketed public offering on a best efforts basis (the "Offering") of up to 25 million units ("Units") in the United States under an effective shelf registration statement on file with the Securities and Exchange Commission ("SEC") and in all provinces of Canada, except Quebec, by way of a shelf prospectus filed pursuant to the Multi-jurisdictional Disclosure System.
Each Unit will be comprised of one common share ("Share") and one-half of a common share purchase warrant of the Company ("Warrant") with each whole Warrant entitling the purchaser to purchase one Share of the Company for a period of 24 months following closing of the Offering.
The Offering will be made by a syndicate of agents (the "Agents") led by Genuity Capital Markets USA Corp. and TD Securities (USA) LLC in the United States and Genuity Capital Markets and TD Securities Inc. in Canada. The Company has agreed to grant the Agents an over-allotment option to purchase up to an additional 15% of the Units sold pursuant to the Offering, either separately or as Units. The Agents may exercise the over-allotment option, in whole or in part, at any time up to 30 days from the closing of the Offering. The Offering is subject to certain conditions, including stock exchange approval.
The Offering will be priced in the context of the market with final terms of the Offering to be determined at the time of pricing. The Company anticipates that the pricing of the Offering will be announced after the close of markets today.
The Company will use the funds to continue its testing activities at Test Sites 1 and 3, continue its exploration activities on its existing permits and licenses and for general corporate purposes. Specific allocations of the proceeds for such purposes have not been made at this time.
The Offering is expected to close on or about May 12, 2009.
Each Unit will be comprised of one common share ("Share") and one-half of a common share purchase warrant of the Company ("Warrant") with each whole Warrant entitling the purchaser to purchase one Share of the Company for a period of 24 months following closing of the Offering.
The Offering will be made by a syndicate of agents (the "Agents") led by Genuity Capital Markets USA Corp. and TD Securities (USA) LLC in the United States and Genuity Capital Markets and TD Securities Inc. in Canada. The Company has agreed to grant the Agents an over-allotment option to purchase up to an additional 15% of the Units sold pursuant to the Offering, either separately or as Units. The Agents may exercise the over-allotment option, in whole or in part, at any time up to 30 days from the closing of the Offering. The Offering is subject to certain conditions, including stock exchange approval.
The Offering will be priced in the context of the market with final terms of the Offering to be determined at the time of pricing. The Company anticipates that the pricing of the Offering will be announced after the close of markets today.
The Company will use the funds to continue its testing activities at Test Sites 1 and 3, continue its exploration activities on its existing permits and licenses and for general corporate purposes. Specific allocations of the proceeds for such purposes have not been made at this time.
The Offering is expected to close on or about May 12, 2009.
Encana Corp Prices $500M Senior Notes
Natural gas producer EnCana Corp on Wednesday sold $500 million of 10-year senior notes, said IFR, a Thomson Reuters service. Bank of America and Deutsche Bank were the joint bookrunning managers for the sale.
Diamond Offshores Drilling Prices $500M Notes
Deepwater driller Diamond Offshore Drilling, Inc (DO.N) on Wednesday sold $500 million of 10-year notes, said IFR, a Thomson Reuters service. Goldman Sachs and J.P. Morgan were the joint bookrunning managers for the sale.
Florida Gas Trans Sells $600M Note Offering
The Florida Gas Transmission Company, a unit of El Paso Corporation (EP.N), on Wednesday sold $600 million of 10-year senior notes in the 144a private placement market, said IFR, a Thomson Reuters service. The size of the deal was increased from an originally planned $500 million. Bank of America, Calyon, Goldman Sachs, and JP Morgan were the joint bookrunning managers for the sale.
Whirlpool Prices $850M Note Offering In Two Tranches
Home appliance maker Whirlpool Corp (WHR.N) on Wednesday sold $850 million in a two-part sale of medium term notes, said IFR, a Thomson Reuters service. Citigroup and J.P. Morgan were the joint bookrunning
managers for the sale.
managers for the sale.
Clean Harbors To Acquire Eveready Inc
U.S. waste-management company Clean Harbors Inc (CLH.N) said it will acquire Eveready Inc (EIS.TO) in a deal that valued the Canadian company at nearly three times its Tuesday close, to help broaden its industrial services market and expand its geographical footprint.
Shares of Clean Harbors rose as much as 9 percent on the New York Stock Exchange in a clear indication that investors cheered the acquisition plan. The stock price of an acquiring company normally dips post a merger announcement.
The deal offers Eveready shareholders a whopping premium of 200 percent, based on its Tuesday's closing share price of Eveready shares of C$3.47.
"Its a good strategic fit for the company (for Clean Harbors). When you look at what they are buying, and the operating leverage that is forthcoming, it makes a lot of sense," Wedbush Morgan analyst Al Kaschalk said by phone.
Norwell, Massachusetts-based Clean Harbors expects the deal to immediately add to earnings, excluding any one-time fees and acquisition-related expenses.
"We envision substantial cross-selling opportunities with Eveready's blue-chip customer base, particularly with respect to refineries and other energy companies," Clean Harbors said.
The combined entity following the completion of the deal will have $130 million in cash and $250 million in debt, Clean Harbors Chief Executive Alan McKim said on a conference call with analysts.
As the global economic downturn worsens, credit markets have also tightened, but Kaschalk said he didn't see financing of deal becoming a concern for Clean Harbors.
DEAL DYNAMICS
As per the terms of the agreement, Clean Harbors will buy Eveready through a combination of cash, stock and assumed debt. If the deal fails to go through, a break up fee will be involved, but Clean Harbors executives did not quantify it on the call.
They, however added, that in case the acquisition does not materialize, Clean Harbors would buy a smaller portion of Eveready's business, which equates $70 million in terms of Eveready revenue.
This would predominantly include Eveready's landfill business in the United States, McKim added.
Earlier on Wednesday, Clean Harbors said it would acquire all of Eveready stock in exchange for $49 million in cash, or $2.64 for each Eveready share, and $118 million in Clean Harbors' stock, which consists of 2.4 million shares (a ratio of 0.1304 Clean Harbors shares for each Eveready share).
CEO McKim said his company also expects to benefit from the "opposite seasonality" of Eveready's business. While the first and fourth quarters are seasonally the weakest for Clean Harbors, Eveready sees a surge in its business during that time, he said.
Eveready, which provides industrial, oilfield maintenance and production services in 79 locations in Canada, the United States and internationally has over 2,100 employees and operates a service fleet of 2,400 trucks and trailer units.
Clean Harbors also said it will maintain current workforce levels at both companies. The company has about 4,808 employees, according to Reuters data.
"This is a growth strategy for us. This is not a headcount reduction plan. This is really how you take one and one and make it three. That is the real message here to both workforces," McKim said during the call.
Shares of Clean Harbors rose as much as 9 percent on the New York Stock Exchange in a clear indication that investors cheered the acquisition plan. The stock price of an acquiring company normally dips post a merger announcement.
The deal offers Eveready shareholders a whopping premium of 200 percent, based on its Tuesday's closing share price of Eveready shares of C$3.47.
"Its a good strategic fit for the company (for Clean Harbors). When you look at what they are buying, and the operating leverage that is forthcoming, it makes a lot of sense," Wedbush Morgan analyst Al Kaschalk said by phone.
Norwell, Massachusetts-based Clean Harbors expects the deal to immediately add to earnings, excluding any one-time fees and acquisition-related expenses.
"We envision substantial cross-selling opportunities with Eveready's blue-chip customer base, particularly with respect to refineries and other energy companies," Clean Harbors said.
The combined entity following the completion of the deal will have $130 million in cash and $250 million in debt, Clean Harbors Chief Executive Alan McKim said on a conference call with analysts.
As the global economic downturn worsens, credit markets have also tightened, but Kaschalk said he didn't see financing of deal becoming a concern for Clean Harbors.
DEAL DYNAMICS
As per the terms of the agreement, Clean Harbors will buy Eveready through a combination of cash, stock and assumed debt. If the deal fails to go through, a break up fee will be involved, but Clean Harbors executives did not quantify it on the call.
They, however added, that in case the acquisition does not materialize, Clean Harbors would buy a smaller portion of Eveready's business, which equates $70 million in terms of Eveready revenue.
This would predominantly include Eveready's landfill business in the United States, McKim added.
Earlier on Wednesday, Clean Harbors said it would acquire all of Eveready stock in exchange for $49 million in cash, or $2.64 for each Eveready share, and $118 million in Clean Harbors' stock, which consists of 2.4 million shares (a ratio of 0.1304 Clean Harbors shares for each Eveready share).
CEO McKim said his company also expects to benefit from the "opposite seasonality" of Eveready's business. While the first and fourth quarters are seasonally the weakest for Clean Harbors, Eveready sees a surge in its business during that time, he said.
Eveready, which provides industrial, oilfield maintenance and production services in 79 locations in Canada, the United States and internationally has over 2,100 employees and operates a service fleet of 2,400 trucks and trailer units.
Clean Harbors also said it will maintain current workforce levels at both companies. The company has about 4,808 employees, according to Reuters data.
"This is a growth strategy for us. This is not a headcount reduction plan. This is really how you take one and one and make it three. That is the real message here to both workforces," McKim said during the call.
Pembina Pipeline Buys Talisman Energy for $250M
Pembina Pipeline Income Fund (PIF_u.TO) agreed on Wednesday to buy Talisman Energy Inc's (TLM.TO) Cutbank natural gas-processing complex for C$300 million ($250 million) as it looks to expand into the sector as it diversifies its operations.
The Cutbank complex in central Alberta includes three gas-processing plants with a combined capacity of 360 million cubic feet per day and 300 km (186 miles) of pipelines that gather natural gas from producers' wells.
Pembina operates 8,000 km (500 miles) of pipelines in Western Canada capable of moving more than 700,000 barrels of oil and natural gas liquids a day.
The Cutbank assets will be the fund's first move into the gas-processing business and it expects its stake in the sector to grow.
"The acquisition will be accretive to unitholders and will diversify Pembina's interests," Bob Michaleski, the fund's chief executive, said in a statement, adding the purchase "provides potential organic and acquisition growth opportunities."
Talisman is selling off assets it no longer considers central to its business, as it looks to raise more than C$2 billion to pay down debt and concentrate its operations.
Pembina intends to pay for the acquisition with bank loans.
The deal is expected to close on June 2.
The Cutbank complex in central Alberta includes three gas-processing plants with a combined capacity of 360 million cubic feet per day and 300 km (186 miles) of pipelines that gather natural gas from producers' wells.
Pembina operates 8,000 km (500 miles) of pipelines in Western Canada capable of moving more than 700,000 barrels of oil and natural gas liquids a day.
The Cutbank assets will be the fund's first move into the gas-processing business and it expects its stake in the sector to grow.
"The acquisition will be accretive to unitholders and will diversify Pembina's interests," Bob Michaleski, the fund's chief executive, said in a statement, adding the purchase "provides potential organic and acquisition growth opportunities."
Talisman is selling off assets it no longer considers central to its business, as it looks to raise more than C$2 billion to pay down debt and concentrate its operations.
Pembina intends to pay for the acquisition with bank loans.
The deal is expected to close on June 2.
Monday, April 27, 2009
GATX Prices $300M Senior Note Offering
Leasing company GATX Corp (GMT.N) on Monday sold $300 million of 5-year senior notes, said IFR, a Thomson Reuters service. The size of the deal was increased from an originally planned $250 million. Bank of America and Citigroup were the joint bookrunning managers for the sale.
Orient-Express Hotels Announces Common Share Offering
Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owners or part-owners and managers of 51 luxury hotels, restaurants, tourist trains and river cruise properties operating in 25 countries, today announced that it plans to sell 15,000,000 shares of newly issued Class A common shares, par value $.01 per share, in an underwritten public offering pursuant to its effective shelf registration statement previously filed with the Securities and Exchange Commission.
The shares being offered represent approximately 30% of the Company's outstanding Class A common shares. The underwriters will be granted a 30-day option to purchase up to an additional 2,250,000 shares to cover over-allotments, if any. The Company intends to use the net proceeds from this offering primarily for debt reduction and general corporate purposes.
Deutsche Bank Securities Inc. will act as the sole bookrunner for this offering.
The shares being offered represent approximately 30% of the Company's outstanding Class A common shares. The underwriters will be granted a 30-day option to purchase up to an additional 2,250,000 shares to cover over-allotments, if any. The Company intends to use the net proceeds from this offering primarily for debt reduction and general corporate purposes.
Deutsche Bank Securities Inc. will act as the sole bookrunner for this offering.
KKR To Buy Oriental Brewery For $1.9B
Anheuser-Busch InBev (INTB.BR) has picked private equity firm Kohlberg Kravis Roberts & Co (KKR) as preferred buyer for Oriental Brewery, South Korea's second-biggest beer maker, an OB official said on Monday.
Online news outlet MoneyToday earlier cited an industry source as saying KKR raised its bid for Oriental Brewery to more than $1.9 billion and accepted most of InBev's demands, trumping rival bids from Affinity Equity Partners and MBK Partners.
"KKR has raised its price several times, changing the aspect of the auction," the unnamed source was quoted as saying. "My understanding is that InBev would sign a SPA (share purchase agreement) with KKR."
An OB official confirmed KKR had been picked as a buyer, but declined to be named as he was not authorised to speak to the media. OB spokeswoman Karen Kim declined to comment.
A banking source, working for one of the three bidding firms, also said KKR, a U.S. private equity house, was understood to have been picked as the buyer.
The online report said KKR scored highly with its financing plan, with strong commitment from foreign banks, though MBK Partners' offer had been the highest.
It added that KKR had accepted InBev's request for paying an additional $100 million if OB's EBITDA (earnings before interest, taxes, depreciation and amortisation) topped estimates in two years after the sale.
With Goldman Sachs (GS.N) as adviser, KKR has JPMorgan, Standard Chartered (STAN.L) and HSBC (HSBA.L) among its backers, as well as Calyon, ING Bank, Natixis and Nomura (8604.T), Reuters Basis Point had reported.
KKR and MBK Partners could not immediately be reached for comment. An Affinity official said he could not confirm the report.
Anheuser-Busch InBev, the world's largest brewer, is looking to sell off non-core assets and repay debt.
MBK is advised by Morgan Stanley (MS.N) and has Hana and Korea Development Bank [KDB.UL] behind it, Basis Point had said.
JPMorgan (JPM.N) and Deutsche Bank (DBKGn.DE) are running the OB sale process
Online news outlet MoneyToday earlier cited an industry source as saying KKR raised its bid for Oriental Brewery to more than $1.9 billion and accepted most of InBev's demands, trumping rival bids from Affinity Equity Partners and MBK Partners.
"KKR has raised its price several times, changing the aspect of the auction," the unnamed source was quoted as saying. "My understanding is that InBev would sign a SPA (share purchase agreement) with KKR."
An OB official confirmed KKR had been picked as a buyer, but declined to be named as he was not authorised to speak to the media. OB spokeswoman Karen Kim declined to comment.
A banking source, working for one of the three bidding firms, also said KKR, a U.S. private equity house, was understood to have been picked as the buyer.
The online report said KKR scored highly with its financing plan, with strong commitment from foreign banks, though MBK Partners' offer had been the highest.
It added that KKR had accepted InBev's request for paying an additional $100 million if OB's EBITDA (earnings before interest, taxes, depreciation and amortisation) topped estimates in two years after the sale.
With Goldman Sachs (GS.N) as adviser, KKR has JPMorgan, Standard Chartered (STAN.L) and HSBC (HSBA.L) among its backers, as well as Calyon, ING Bank, Natixis and Nomura (8604.T), Reuters Basis Point had reported.
KKR and MBK Partners could not immediately be reached for comment. An Affinity official said he could not confirm the report.
Anheuser-Busch InBev, the world's largest brewer, is looking to sell off non-core assets and repay debt.
MBK is advised by Morgan Stanley (MS.N) and has Hana and Korea Development Bank [KDB.UL] behind it, Basis Point had said.
JPMorgan (JPM.N) and Deutsche Bank (DBKGn.DE) are running the OB sale process
Friday, April 24, 2009
AT&T Announces $2.7B Two Tranche Bond Offering
U.S. telecoms carrier AT&T Inc (T.N) has set the size of a planned two-part bond at 1.85 billion pounds ($2.7 billion), IFR reported on Friday.
Guidance for a 750 million pound eight-year bond has been tightened to gilts plus 285 basis points from an initial range of 290 to 295 basis points, said IFR Markets, a Thomson Reuters online news and market analysis service.
Guidance on a 1.1 billion pound 31-year bond has tightened to gilts plus 255 basis points from an initial range of 260 to 265 basis points, said IFR.
Barclays, Deutsche Bank and UBS have been named to manage the deal, IFR said.
Guidance for a 750 million pound eight-year bond has been tightened to gilts plus 285 basis points from an initial range of 290 to 295 basis points, said IFR Markets, a Thomson Reuters online news and market analysis service.
Guidance on a 1.1 billion pound 31-year bond has tightened to gilts plus 255 basis points from an initial range of 260 to 265 basis points, said IFR.
Barclays, Deutsche Bank and UBS have been named to manage the deal, IFR said.
Thursday, April 23, 2009
LaSalle Hotel Props Announces 8.6M Share Offering
LaSalle Hotel Properties (NYSE:LHO - News) today announced that it plans to sell 7,500,000 common shares in an underwritten public offering pursuant to its effective shelf registration statement previously filed with the Securities and Exchange Commission.
The Company also plans to grant the underwriters an option to purchase up to an additional 1,125,000 common shares to cover over-allotments, if any.
Merrill Lynch & Co. is acting as sole book-running manager for the offering. Raymond James, Wachovia Securities and BMO Capital Markets are acting as co-lead managers
The Company also plans to grant the underwriters an option to purchase up to an additional 1,125,000 common shares to cover over-allotments, if any.
Merrill Lynch & Co. is acting as sole book-running manager for the offering. Raymond James, Wachovia Securities and BMO Capital Markets are acting as co-lead managers
Host Hotels Announces 69M Share Offering
Host Hotels & Resorts, Inc. (NYSE: HST - News) announced that it has commenced an underwritten public offering of 60,000,000 shares of its common stock. The joint book-running managers for this offering are Merrill Lynch & Co. and Deutsche Bank Securities. The underwriters will be granted a 30-day option to purchase up to an additional 9,000,000 shares of common stock to cover over-allotments, if any
SandRidge Energy Announces 17.5M Share Offering
SandRidge Energy, Inc. (NYSE: SD - News) today announced a registered underwritten public offering of 12,200,000 shares of its common stock. In addition, Tom L. Ward, the Company's Chairman, Chief Executive Officer and President, is offering 3,000,000 shares of common stock. Following the completion of the offering, Mr. Ward will continue to beneficially own 26,051,577 shares of common stock of the Company.
The Company has granted the underwriter a 30-day option to purchase up to 2,280,000 additional shares of common stock to cover over-allotments. Net proceeds to the Company from the offering are expected to be used for general corporate purposes, including to repay a portion of the amount outstanding under the Company's revolving credit facility and/or to fund a portion of the Company's 2009 exploration, development and other capital expenditures. The Company will not receive any of the proceeds from the shares of its common stock sold by Mr. Ward.
Morgan Stanley & Co. Incorporated is acting as book-running manager of the offering.
The Company has granted the underwriter a 30-day option to purchase up to 2,280,000 additional shares of common stock to cover over-allotments. Net proceeds to the Company from the offering are expected to be used for general corporate purposes, including to repay a portion of the amount outstanding under the Company's revolving credit facility and/or to fund a portion of the Company's 2009 exploration, development and other capital expenditures. The Company will not receive any of the proceeds from the shares of its common stock sold by Mr. Ward.
Morgan Stanley & Co. Incorporated is acting as book-running manager of the offering.
Encore Prices $225M Senior Note Offering
Encore Acquisition Company (NYSE:EAC - News) (“Encore”) announced today that it has priced an underwritten public offering of $225 million of Senior Subordinated Notes due 2016, which will bear interest at a rate of 9.50% per annum. The notes are being sold at 92.228% of par, which equates to an effective yield to maturity of approximately 11.125%. Encore expects to close the sale of the notes on April 27, 2009, subject to the satisfaction of customary closing conditions.
Encore intends to use the net proceeds of the proposed offering to repay outstanding borrowings under its revolving credit facility. The offering is being made under Encore’s existing shelf registration statement previously filed with the Securities and Exchange Commission (the “SEC”).
Banc of America Securities LLC and Wachovia Securities are acting as joint bookrunning managers for the offering
Encore intends to use the net proceeds of the proposed offering to repay outstanding borrowings under its revolving credit facility. The offering is being made under Encore’s existing shelf registration statement previously filed with the Securities and Exchange Commission (the “SEC”).
Banc of America Securities LLC and Wachovia Securities are acting as joint bookrunning managers for the offering
Parkway Properties Prices $98M Share Offering
Parkway Properties, Inc. (NYSE: PKY - News) announced today the pricing of 6.25 million shares of common stock in a public offering at a price of $13.71 per share. In addition, Parkway has granted to the underwriter for the public offering an option for 30 days to purchase up to 937,500 additional shares of common stock to cover overallotments, if any.
UBS Investment Bank is the sole underwriter for the offering. Subject to customary closing conditions, the offering is expected to close on April 27, 2009.
UBS Investment Bank is the sole underwriter for the offering. Subject to customary closing conditions, the offering is expected to close on April 27, 2009.
Wednesday, April 22, 2009
Triangle Capital Prices $13M Share Offering
Triangle Capital Corp (TCAP.O) said its offering of 1.2 million shares was priced at $10.75 per share.
The offering is at a discount of 7 percent to the stock's Tuesday closing of $11.60.
The company expects net proceeds of about $11.9 million, which it intends to invest in lower middle market companies, and for working capital and general corporate purposes.
The company has granted the underwriters an option to purchase up to 180,000 additional shares of common stock to cover over-allotments, if any.
The underwriters of this offering are Morgan Keegan & Co Inc, BB&T Capital Markets and RBC Capital Markets.
The offering is at a discount of 7 percent to the stock's Tuesday closing of $11.60.
The company expects net proceeds of about $11.9 million, which it intends to invest in lower middle market companies, and for working capital and general corporate purposes.
The company has granted the underwriters an option to purchase up to 180,000 additional shares of common stock to cover over-allotments, if any.
The underwriters of this offering are Morgan Keegan & Co Inc, BB&T Capital Markets and RBC Capital Markets.
Meru Networks Closes $30M Series E Funding
Meru Networks, the top privately held developer of Wi-Fi technology for enterprises, will announce Monday, April 20, a $30 million Series E round led by new investor Vision Capital Advisors LLC.
The round, which brings the amount raised by the Sunnyvale, Calif.-based company to over $100 million, was joined by existing investors Clearstone Venture Partners, NeoCarta Ventures Inc., BlueStream Ventures, the D.E. Shaw Group, Evercore Partners, Tenaya Capital and Monitor Ventures.
Meru, which was founded in 2002, offers wireless local area network equipment based upon the 802.11n standard, which enables higher flows, or "throughput," of data and voice traffic than previous incarnations of the technology. The company has customers in every industry vertical, said Meru CEO Ihab Abu-Hakima, but has a particularly strong base in the educational and healthcare sectors.
Rather than using a network architecture based on wireless hubs that force users to compete for bandwidth, Meru has developed a technology that can efficiently dole out bandwidth as it is needed.
"Meru was founded on the vision that sooner or later most enterprise will run their business on wireless infrastructure," Abu-Hakima said. "From day one the company designed a whole new architectural approach to support this."
The round represented a decline in valuation for Meru, but was "not a washout," said NeoCarta managing director Barry Newman, who sits on the company's board.
Meru is one of a handful of survivors in the wireless LAN sector, as that market has shaken out over the past several years, with some companies changing focus, some going out of business and others being acquired.
San Jose, Calif.-based Cisco Systems Inc., which acquired wireless LAN developer Airespace Inc. for $450 million in 2005, is the big rival in the space. Meru also competes with publicly traded Aruba Wireless Networks Inc. of Sunnyvale, Calif.
In an April 6 report issued by wireless consulting and research firm Novarum Inc., Meru scored high in tests against Cisco's and Aruba's Wi-Fi access points. It consistently beat or matched its rivals in throughput, giving equal access to various wireless users on a network, the ability to handle heavy voice and data traffic and power consumption. The report was sponsored by Meru.
"Wireless in the enterprise has evolved from a facility of convenience to a way to manage costs and be more efficient," Newman said. "That said, we are still at the very early stages of wireless as part of commercial infrastructure of enterprises, but what we offer is higher performance and higher reliability that can handle a proliferation of wireless devices that wasn't contemplated by earlier generations of technology."
The funding news should put to rest, at least for the time being, persistent rumors that Meru is on the block, possibly a target for a networking company like Juniper Networks Inc. of Sunnyvale.
"I've been reading stories about this every quarter or so for the last three years," Newman said. "Many companies in the wireless space have either been sold or were up for sale in the last couple of years, so speculating about M&A in this space is certainly not a crazy thing."
Abu-Hakima said he expects this round to be Meru's last, and that the company intends to go public within the next 12 months, depending on market conditions.
For legal counsel, Meru retained Stanley Pierson of Pillsbury Winthrop Shaw Pittman LLP.
The round, which brings the amount raised by the Sunnyvale, Calif.-based company to over $100 million, was joined by existing investors Clearstone Venture Partners, NeoCarta Ventures Inc., BlueStream Ventures, the D.E. Shaw Group, Evercore Partners, Tenaya Capital and Monitor Ventures.
Meru, which was founded in 2002, offers wireless local area network equipment based upon the 802.11n standard, which enables higher flows, or "throughput," of data and voice traffic than previous incarnations of the technology. The company has customers in every industry vertical, said Meru CEO Ihab Abu-Hakima, but has a particularly strong base in the educational and healthcare sectors.
Rather than using a network architecture based on wireless hubs that force users to compete for bandwidth, Meru has developed a technology that can efficiently dole out bandwidth as it is needed.
"Meru was founded on the vision that sooner or later most enterprise will run their business on wireless infrastructure," Abu-Hakima said. "From day one the company designed a whole new architectural approach to support this."
The round represented a decline in valuation for Meru, but was "not a washout," said NeoCarta managing director Barry Newman, who sits on the company's board.
Meru is one of a handful of survivors in the wireless LAN sector, as that market has shaken out over the past several years, with some companies changing focus, some going out of business and others being acquired.
San Jose, Calif.-based Cisco Systems Inc., which acquired wireless LAN developer Airespace Inc. for $450 million in 2005, is the big rival in the space. Meru also competes with publicly traded Aruba Wireless Networks Inc. of Sunnyvale, Calif.
In an April 6 report issued by wireless consulting and research firm Novarum Inc., Meru scored high in tests against Cisco's and Aruba's Wi-Fi access points. It consistently beat or matched its rivals in throughput, giving equal access to various wireless users on a network, the ability to handle heavy voice and data traffic and power consumption. The report was sponsored by Meru.
"Wireless in the enterprise has evolved from a facility of convenience to a way to manage costs and be more efficient," Newman said. "That said, we are still at the very early stages of wireless as part of commercial infrastructure of enterprises, but what we offer is higher performance and higher reliability that can handle a proliferation of wireless devices that wasn't contemplated by earlier generations of technology."
The funding news should put to rest, at least for the time being, persistent rumors that Meru is on the block, possibly a target for a networking company like Juniper Networks Inc. of Sunnyvale.
"I've been reading stories about this every quarter or so for the last three years," Newman said. "Many companies in the wireless space have either been sold or were up for sale in the last couple of years, so speculating about M&A in this space is certainly not a crazy thing."
Abu-Hakima said he expects this round to be Meru's last, and that the company intends to go public within the next 12 months, depending on market conditions.
For legal counsel, Meru retained Stanley Pierson of Pillsbury Winthrop Shaw Pittman LLP.
Encore Acq. Announces Senior Note Offering
Encore Acquisition Company (NYSE:EAC - News) announced today that it intends to offer, subject to market and other conditions, senior subordinated notes due 2016 in an underwritten public offering. The offering will be made under Encore's shelf registration statement, which became effective immediately upon filing with the Securities and Exchange Commission (the “SEC”) on April 22, 2009.
Encore intends to use the net proceeds of the proposed offering to repay outstanding borrowings under its revolving credit facility.
Banc of America Securities LLC and Wachovia Securities are acting as joint bookrunning managers for the offering
Encore intends to use the net proceeds of the proposed offering to repay outstanding borrowings under its revolving credit facility.
Banc of America Securities LLC and Wachovia Securities are acting as joint bookrunning managers for the offering
Jarden Prices $210M Common Share Offering
Jarden Corporation (NYSE: JAH - News) announced today that it has priced, in an underwritten public offering, 12 million shares of common stock at $17.50 per share. The offering was made through Barclays Capital, as sole underwriter, and is expected to close April 27, 2009 subject to standard closing conditions
Tuesday, April 21, 2009
Davie Yards To Offer $20M Private Placement Of Shs
Canada's Davie Yards Inc (DAV.TO) said it plans to offer 244 million shares as part of a $20 million private placement to improve its financial situation.
The operator of the Davie shipyard in Quebec said the offering, which represents nearly triple the current number of its outstanding shares, will be priced at 10 Canadian cents a share.
On March 30, the company said it doubted its ability to continue as a going concern if the private placement fails. [ID:nBNG436818]
The issue price is at a greater discount to market than allowed without shareholder approval under the Toronto Stock Exchange's rules, said the company, which is seeking an exemption from the shareholder approval requirement.
The offer price represents a discount of 35 percent to the stock's Tuesday closing price of 15.5 Canadian cents.
Davie said its client Cecon ASA will acquire 122 million shares, representing 33.1 percent of Davie's outstanding shares after the offering.
The company will issue 49.8 million shares to its indirect controlling stakeholder Offshore Holding AS to repay the nearly $4.1 million it owes Offshore.
Wellington Management Co, which owns 6.9 percent of Davie's shares, will acquire 42.2 million shares to raise its stake to 13.8 percent.
Davie appointed Pareto Securities AS and Dundee Securities Corp to act as its financial advisor and agent for the share placement
The operator of the Davie shipyard in Quebec said the offering, which represents nearly triple the current number of its outstanding shares, will be priced at 10 Canadian cents a share.
On March 30, the company said it doubted its ability to continue as a going concern if the private placement fails. [ID:nBNG436818]
The issue price is at a greater discount to market than allowed without shareholder approval under the Toronto Stock Exchange's rules, said the company, which is seeking an exemption from the shareholder approval requirement.
The offer price represents a discount of 35 percent to the stock's Tuesday closing price of 15.5 Canadian cents.
Davie said its client Cecon ASA will acquire 122 million shares, representing 33.1 percent of Davie's outstanding shares after the offering.
The company will issue 49.8 million shares to its indirect controlling stakeholder Offshore Holding AS to repay the nearly $4.1 million it owes Offshore.
Wellington Management Co, which owns 6.9 percent of Davie's shares, will acquire 42.2 million shares to raise its stake to 13.8 percent.
Davie appointed Pareto Securities AS and Dundee Securities Corp to act as its financial advisor and agent for the share placement
DigitalGlobe Prices $355M Senior Note Offering
Colorado-based Satellite imagery company DigitalGlobe Inc, on Tuesday sold $355 million of five-year senior secured notes in the 144a private placement market, said IFR, a Thomson Reuters service. The size of the deal was increased from an originally planned $300 million. Morgan Stanley was the sole bookrunning manager for the sale.
Toledo Edison Prices $300M Sr Notes
Toledo Edison Company, a subsidiary of
FirstEnergy Corp (FE.N), on Tuesday sold $300 million of
11-year senior secured notes backed by first mortgage bonds,
said IFR, a Thomson Reuters service. Citigroup, Credit Suisse, JP Morgan and Morgan Stanley were the joint bookrunning managers for the sale.
FirstEnergy Corp (FE.N), on Tuesday sold $300 million of
11-year senior secured notes backed by first mortgage bonds,
said IFR, a Thomson Reuters service. Citigroup, Credit Suisse, JP Morgan and Morgan Stanley were the joint bookrunning managers for the sale.
RBC Announces $C200M Note Offering
Royal Bank of Canada (RY.TO) announced another preferred share offering on Tuesday to bolster its capital ratio, the latest in a string of offerings by Canada's big banks to shore up balance sheets as the economy slides.
Royal Bank's C$200 million ($162 million) offer is for 8 million noncumulative five-year rate reset preferred shares, at a price of C$25 each. Underwriters will have an option to buy an additional 3 million shares at the offering price.
The offering comes just a month after Royal Bank, Canada's largest bank by market capitalization, announced a C$400 million preferred share offering -- a sign that the appetite for such offerings from the nation's still-profitable banks remains healthy.
All of Canada's Big Six banks have launched preferred share or note offerings this year.
While the country's banking system has been ranked as the world's soundest and has comparatively strong capital ratios, management teams are taking no chances, given the intensity of the global financial crisis.
"We routinely undertake funding transactions to maintain strong capital ratios and a cost effective capital structure. Net proceeds from this transaction will be used for general business purposes," Royal Bank said in a statement.
Royal reported in February that it had a Tier 1 capital ratio of 10.6 percent at the close of its first quarter, ended Jan. 31.
The latest offering will be led by Royal's own RBC Capital Markets unit and is expected to close on April 29.
Royal Bank's C$200 million ($162 million) offer is for 8 million noncumulative five-year rate reset preferred shares, at a price of C$25 each. Underwriters will have an option to buy an additional 3 million shares at the offering price.
The offering comes just a month after Royal Bank, Canada's largest bank by market capitalization, announced a C$400 million preferred share offering -- a sign that the appetite for such offerings from the nation's still-profitable banks remains healthy.
All of Canada's Big Six banks have launched preferred share or note offerings this year.
While the country's banking system has been ranked as the world's soundest and has comparatively strong capital ratios, management teams are taking no chances, given the intensity of the global financial crisis.
"We routinely undertake funding transactions to maintain strong capital ratios and a cost effective capital structure. Net proceeds from this transaction will be used for general business purposes," Royal Bank said in a statement.
Royal reported in February that it had a Tier 1 capital ratio of 10.6 percent at the close of its first quarter, ended Jan. 31.
The latest offering will be led by Royal's own RBC Capital Markets unit and is expected to close on April 29.
Oracle Buys Sun Micro For $7.4 Billion
Business software maker Oracle Corp. said Monday it has entered into a definitive agreement to buy server builder Sun Microsystems in a deal worth $7.4 billion.
Oracle said it will buy Sun common stock for $9.50 per share in cash, a 42% premium from Friday's closing price of $6.69.
After accounting for Sun's cash and debt, the deal's value is $5.6 billion, the companies said.
The announcement comes after Sun reportedly rejected a $7 billion buyout offer from IBM (IBM, Fortune 500) earlier this month.
The Redwood Shores, Calif.-based Oracle said it expects Sun to contribute over $1.5 billion to its operating profit this year, and over $2 billion in the second year.
On a per share basis, Oracle expects Sun to add 15 cents to its adjusted earnings in the first full year after closing. The deal is expected to close this summer.
Shares of Oracle (ORCL, Fortune 500) fell nearly 5.5% to $18, while Sun (JAVA, Fortune 500) soared nearly 36% to $9.10 in early trading.
"The acquisition of Sun transforms the IT industry," said Oracle chief executive Larry Ellison, in a statement. "Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."
Oracle, which has made 52 acquisitions since January 2005, said it sees "strategic customer advantages" to owning two of Sun's most popular software products: the programming language Java and the Solaris operating system.
"This is a fantastic day for Sun's customers, developers, partners and employees across the globe," said Jonathan Schwartz, Sun's chief executive. "[By] joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace."
However, the deal belies Oracle's need to prevent Java from being controlled by a rival software company, according to Brent Williams, an analyst who covers the tech sector for The Benchmark Company in New York.
"This deal strikes me as an extremely defensive move," Williams said. "This is all about who owns Java technology, which is the core of most enterprise applications."
Williams said rival buyers, such as IBM, could have made Java a non-proprietary "open source" software. That would have posed a "major price threat" to Oracle, the world's largest enterprise software company, he added.
On the other hand, the deal reflects the tech industry's move towards more bundled products, according to Shaw Wu, an analyst at Kaufman Brothers Equity Research.
"We believe this [acquisition] supports our industry thesis that vertical integration works, meaning having an integrated stack of hardware, software, and services to sell to customers," Wu wrote in a research report.
According to Wu, companies such as Hewlett-Packard (HPQ, Fortune 500), IBM, Apple (APPL), and blackberry maker Research in Motion (RIIM) have had success with such models.
Still, analysts said questions remain about Oracle's ability to digest Sun's server business, which has been losing market share to larger rivals such as IBM and H-P.
The deal is subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.
Oracle said it will buy Sun common stock for $9.50 per share in cash, a 42% premium from Friday's closing price of $6.69.
After accounting for Sun's cash and debt, the deal's value is $5.6 billion, the companies said.
The announcement comes after Sun reportedly rejected a $7 billion buyout offer from IBM (IBM, Fortune 500) earlier this month.
The Redwood Shores, Calif.-based Oracle said it expects Sun to contribute over $1.5 billion to its operating profit this year, and over $2 billion in the second year.
On a per share basis, Oracle expects Sun to add 15 cents to its adjusted earnings in the first full year after closing. The deal is expected to close this summer.
Shares of Oracle (ORCL, Fortune 500) fell nearly 5.5% to $18, while Sun (JAVA, Fortune 500) soared nearly 36% to $9.10 in early trading.
"The acquisition of Sun transforms the IT industry," said Oracle chief executive Larry Ellison, in a statement. "Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."
Oracle, which has made 52 acquisitions since January 2005, said it sees "strategic customer advantages" to owning two of Sun's most popular software products: the programming language Java and the Solaris operating system.
"This is a fantastic day for Sun's customers, developers, partners and employees across the globe," said Jonathan Schwartz, Sun's chief executive. "[By] joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace."
However, the deal belies Oracle's need to prevent Java from being controlled by a rival software company, according to Brent Williams, an analyst who covers the tech sector for The Benchmark Company in New York.
"This deal strikes me as an extremely defensive move," Williams said. "This is all about who owns Java technology, which is the core of most enterprise applications."
Williams said rival buyers, such as IBM, could have made Java a non-proprietary "open source" software. That would have posed a "major price threat" to Oracle, the world's largest enterprise software company, he added.
On the other hand, the deal reflects the tech industry's move towards more bundled products, according to Shaw Wu, an analyst at Kaufman Brothers Equity Research.
"We believe this [acquisition] supports our industry thesis that vertical integration works, meaning having an integrated stack of hardware, software, and services to sell to customers," Wu wrote in a research report.
According to Wu, companies such as Hewlett-Packard (HPQ, Fortune 500), IBM, Apple (APPL), and blackberry maker Research in Motion (RIIM) have had success with such models.
Still, analysts said questions remain about Oracle's ability to digest Sun's server business, which has been losing market share to larger rivals such as IBM and H-P.
The deal is subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.
Kimberly-Clark BuysJackson Products
Kimberly-Clark Corp. can now count industrial safety gear among its wares.
The Dallas maker of Kleenex tissues and Huggies diapers announced late Tuesday, April 14, that it had agreed to acquire privately held industrial safety products maker Jackson Products Inc. of Fenton, Mo.
Terms were not disclosed, but the target, which uses the trade name Jackson Safety, reported revenue of $123.7 million for 2008, according to the St. Louis Business Journal.
The company was founded in 1933 and sells welding safety gear such as eye goggles, gloves and helmets. It employs 400 people.
Jackson will operate within Kimberly-Clark's professional products unit, which makes safety apparel for out-of-home use, as well as washroom and skin products. That division recorded $3.1 billion in revenue for 2008, up from $3 billion a year prior.
Operating profit was $428 million for the division, down from $478 million in 2007. The company blamed the slide on increased raw materials and manufacturing costs.
Jackson CEO Tom Burns will continue to operate the target as a division within Kimberly-Clark.
Kimberly-Clark and Jackson Product officials did not return calls seeking comment Wednesday.
"Jackson Safety brings a wealth of strengths to Kimberly-Clark's business, including an outstanding product portfolio and a highly experienced sales force," Jan Spencer, president of Kimberly-Clark's professional sales unit, said in a statement.
Partners Soren Lindstrom, Stephen Marcus, Aileen Hooks and Rufus Oliver of Baker Botts LLP led the legal team for Kimberly-Clark. The buyer did not disclose a financial adviser.
Jim Lavelle and Eugene Bazemore of Houlihan Lokey Howard & Zukin Inc. gave financial advice to Jackson Products. Partners Bruce Herzog and Mark Getachew of Willkie Farr & Gallagher LLP were outside counsel to Jackson.
Jackson Products produces and sells industrial safety equipment used in construction and manufacturing.
Kimberly-Clark produces health and hygiene products under such brand names as Scott paper towels, Depends undergarments and Cottonelle toilet paper. The company was founded in 1872 and has a market capitalization of $20.3 billion.
The Dallas maker of Kleenex tissues and Huggies diapers announced late Tuesday, April 14, that it had agreed to acquire privately held industrial safety products maker Jackson Products Inc. of Fenton, Mo.
Terms were not disclosed, but the target, which uses the trade name Jackson Safety, reported revenue of $123.7 million for 2008, according to the St. Louis Business Journal.
The company was founded in 1933 and sells welding safety gear such as eye goggles, gloves and helmets. It employs 400 people.
Jackson will operate within Kimberly-Clark's professional products unit, which makes safety apparel for out-of-home use, as well as washroom and skin products. That division recorded $3.1 billion in revenue for 2008, up from $3 billion a year prior.
Operating profit was $428 million for the division, down from $478 million in 2007. The company blamed the slide on increased raw materials and manufacturing costs.
Jackson CEO Tom Burns will continue to operate the target as a division within Kimberly-Clark.
Kimberly-Clark and Jackson Product officials did not return calls seeking comment Wednesday.
"Jackson Safety brings a wealth of strengths to Kimberly-Clark's business, including an outstanding product portfolio and a highly experienced sales force," Jan Spencer, president of Kimberly-Clark's professional sales unit, said in a statement.
Partners Soren Lindstrom, Stephen Marcus, Aileen Hooks and Rufus Oliver of Baker Botts LLP led the legal team for Kimberly-Clark. The buyer did not disclose a financial adviser.
Jim Lavelle and Eugene Bazemore of Houlihan Lokey Howard & Zukin Inc. gave financial advice to Jackson Products. Partners Bruce Herzog and Mark Getachew of Willkie Farr & Gallagher LLP were outside counsel to Jackson.
Jackson Products produces and sells industrial safety equipment used in construction and manufacturing.
Kimberly-Clark produces health and hygiene products under such brand names as Scott paper towels, Depends undergarments and Cottonelle toilet paper. The company was founded in 1872 and has a market capitalization of $20.3 billion.
Broadcom Makes $764M Hostile Bid For Emulex
Chipmaker Broadcom Corp (BRCM.O) has made an unsolicited bid to buy Emulex Corp (ELX.N) for $764 million, and is suing the storage-equipment maker for adopting a "poison pill" to prevent a hostile takeover.
Broadcom said on Tuesday it sought talks with Emulex and its board in late December but was rebuffed by Emulex who said in early January that it was "not for sale and abruptly cut off the possibility of further discussions."
A representative for Emulex, which makes components used to connect computers to remote storage equipment, was not immediately available for comment.
Broadcom, a maker of chips for everything from cell phones to television set-top boxes, said it was willing to pay $9.25 per share in cash for Emulex, equivalent to a 40 percent premium over the company's Monday closing price.
Shares of Emulex jumped 41 percent to $9.30 in premarket trading, while Broadcom shares fell 8 percent to $20.05 after the chipmaker separately posted a quarterly loss.
Broadcom said Emulex adopted a "poison pill" amendment a week after it rejected Broadcom's overtures.
As a result, Broadcom said it was "commencing an action in the Delaware Court of Chancery against Emulex and its Board" to nullify a portion of its amended bylaws that says they may not be altered or repealed by shareholders without votes representing more than 66 percent of outstanding shares.
Broadcom said it had completed "extensive analysis and due diligence" on Emulex based on public information, and that it would expect a deal to add to its earnings per share in 2010.
Broadcom posted a first-quarter loss of $91.9 million, or 19 cents per share, compared with a profit of $74.3 million, or 14 cents per share in the same quarter the year before.
Excluding stock options and other items, Broadcom's earnings per share would have been 7 cents, higher than the average analyst estimate of 3 cents, according to Reuters estimates.
Revenue fell 17 percent to $853.4 million in the first quarter, topping the average Wall Street forecast of $848.25 million.
Broadcom expects second quarter revenue in a range of $900 million to $975 million, above the average analyst estimate of $865 million, according to Reuters Estimates.
Broadcom retained Banc of America as its financial advisor for the Emulex offer and Skadden, Arps, Slate, Meagher & Flom is its legal advisor.
Broadcom said on Tuesday it sought talks with Emulex and its board in late December but was rebuffed by Emulex who said in early January that it was "not for sale and abruptly cut off the possibility of further discussions."
A representative for Emulex, which makes components used to connect computers to remote storage equipment, was not immediately available for comment.
Broadcom, a maker of chips for everything from cell phones to television set-top boxes, said it was willing to pay $9.25 per share in cash for Emulex, equivalent to a 40 percent premium over the company's Monday closing price.
Shares of Emulex jumped 41 percent to $9.30 in premarket trading, while Broadcom shares fell 8 percent to $20.05 after the chipmaker separately posted a quarterly loss.
Broadcom said Emulex adopted a "poison pill" amendment a week after it rejected Broadcom's overtures.
As a result, Broadcom said it was "commencing an action in the Delaware Court of Chancery against Emulex and its Board" to nullify a portion of its amended bylaws that says they may not be altered or repealed by shareholders without votes representing more than 66 percent of outstanding shares.
Broadcom said it had completed "extensive analysis and due diligence" on Emulex based on public information, and that it would expect a deal to add to its earnings per share in 2010.
Broadcom posted a first-quarter loss of $91.9 million, or 19 cents per share, compared with a profit of $74.3 million, or 14 cents per share in the same quarter the year before.
Excluding stock options and other items, Broadcom's earnings per share would have been 7 cents, higher than the average analyst estimate of 3 cents, according to Reuters estimates.
Revenue fell 17 percent to $853.4 million in the first quarter, topping the average Wall Street forecast of $848.25 million.
Broadcom expects second quarter revenue in a range of $900 million to $975 million, above the average analyst estimate of $865 million, according to Reuters Estimates.
Broadcom retained Banc of America as its financial advisor for the Emulex offer and Skadden, Arps, Slate, Meagher & Flom is its legal advisor.
Trilogy Ent. Offers $15.8M For Autobytel Inc
A suitor has emerged for Autobytel Inc.
The Irvine, Calif., online automotive retailer is now the target of a $15.8 million, or 35 cents per share, offer by data management software company Trilogy Enterprises Inc. of Austin, Texas, the bidder announced Monday, April 20.
"We are pleased to offer a significant premium to Autobytel's shareholders," said Trilogy senior vice president Sean Fallon in a statement. "The automotive industry is experiencing an unprecedented decline and we believe that Autobytel must take steps now to ensure its shareholders receive the highest value."
Trilogy already owns 7.4% of Autobytel's stock and is its second-largest shareholder. The company said its offer represents a 32% premium to the stock's 30-day average closing price. The bid offers a 17% premium to Autobytel's Friday closing price of 30 cents.
Trilogy is making the offer, which expires midnight May 19, through its Infield Acquisition Inc. subsidiary.
The tender was detailed in an April 20 letter to Autobytel CEO Jeffrey Coats and Autobytel's board.
"We believe Autobytel is facing a crucial period in its corporate existence," the letter said. "Autobytel has historically struggled to create an independently viable business. Shareholder cash and value is at stake."
The letter said Autobytel has experienced continual operating losses and declining revenue for the last three years.
The company recorded an $84.3 million operating loss for 2008, significantly more than the $17.2 million loss it reported in 2007.
Senior research analyst Steve Denault at Northland Securities Inc. in Minneapolis said he felt Trilogy had identified Autobytel as an opportunistic target.
Autobytel owns Web sites where consumers can sell, buy and research cars. The auto industry slump has hurt it.
"Most of what Autobytel does is lead generation for car sales. They generate it on their own and in turn sell it off to a dealer," he said.
Denault added it would complement Trilogy's business management software offerings.
The bid comes three months after Autobytel called off an RBC Capital Markets-led auction without a sale.
After announcing it would cut 35% of its workforce, Autobytel announced Sept. 26 it had tapped RBC to explore options, including an asset or company sale. Autobytel said it would also consider acquisitions at the time.
"The reason that nothing happened while they were on the block in my opinion is that offers didn't place enough value on the core business," Denault said.
Denault speculated that competitor Dealix Corp. might emerge as a rival bidder. Dealix is a unit of Seattle car marketing firm Cobalt Group Inc.
Autobytel and Trilogy did not return calls seeking comment.
Autobytel has a market capitalization of $19.9 million.
Clients of management-owned Trilogy include British Airways plc, Chrysler LLC, Ford Motor Co., and Nissan Motor Co. Ltd.
The Irvine, Calif., online automotive retailer is now the target of a $15.8 million, or 35 cents per share, offer by data management software company Trilogy Enterprises Inc. of Austin, Texas, the bidder announced Monday, April 20.
"We are pleased to offer a significant premium to Autobytel's shareholders," said Trilogy senior vice president Sean Fallon in a statement. "The automotive industry is experiencing an unprecedented decline and we believe that Autobytel must take steps now to ensure its shareholders receive the highest value."
Trilogy already owns 7.4% of Autobytel's stock and is its second-largest shareholder. The company said its offer represents a 32% premium to the stock's 30-day average closing price. The bid offers a 17% premium to Autobytel's Friday closing price of 30 cents.
Trilogy is making the offer, which expires midnight May 19, through its Infield Acquisition Inc. subsidiary.
The tender was detailed in an April 20 letter to Autobytel CEO Jeffrey Coats and Autobytel's board.
"We believe Autobytel is facing a crucial period in its corporate existence," the letter said. "Autobytel has historically struggled to create an independently viable business. Shareholder cash and value is at stake."
The letter said Autobytel has experienced continual operating losses and declining revenue for the last three years.
The company recorded an $84.3 million operating loss for 2008, significantly more than the $17.2 million loss it reported in 2007.
Senior research analyst Steve Denault at Northland Securities Inc. in Minneapolis said he felt Trilogy had identified Autobytel as an opportunistic target.
Autobytel owns Web sites where consumers can sell, buy and research cars. The auto industry slump has hurt it.
"Most of what Autobytel does is lead generation for car sales. They generate it on their own and in turn sell it off to a dealer," he said.
Denault added it would complement Trilogy's business management software offerings.
The bid comes three months after Autobytel called off an RBC Capital Markets-led auction without a sale.
After announcing it would cut 35% of its workforce, Autobytel announced Sept. 26 it had tapped RBC to explore options, including an asset or company sale. Autobytel said it would also consider acquisitions at the time.
"The reason that nothing happened while they were on the block in my opinion is that offers didn't place enough value on the core business," Denault said.
Denault speculated that competitor Dealix Corp. might emerge as a rival bidder. Dealix is a unit of Seattle car marketing firm Cobalt Group Inc.
Autobytel and Trilogy did not return calls seeking comment.
Autobytel has a market capitalization of $19.9 million.
Clients of management-owned Trilogy include British Airways plc, Chrysler LLC, Ford Motor Co., and Nissan Motor Co. Ltd.
Monday, April 20, 2009
BlueGem Water Acquires Panmure Gordon
BlueGem Water and a private investor agreed to acquire a 40.3% stake in Panmure Gordon,the UK investment company, for 17 million EUR. The deal is expected to be completed in May 2009. Lincoln International advised BlueGem; ING advised Panmure Gordon.
SSL Intl Acquires 34.5% Stake in BLBV
SSL International, a UK healhtcare products company, agreed to acquire a 34.5% stake in BLBV, a Dutch condoms and medical products company for 70 million EUR. Lazard advised SSL International.
Avocet Offers To Acquire Wega Mining for 81M EUR
Avocet Mining,the UK gold mining company, launched an offer to acquire Wega Mining, the Norwegian gold mining company, for 81 million EUR. The acquisition provides Avocet with the opportunity to increase its production and resources and enter into West Africa. The acquisition will provide the required funding to complete Wega's Insta Gold project. The transaction is expected to close in June 2009. First Securities, JPMorgan Cazenove, and Ambrian Partners advised Avocet; while Pareto and Arctic Securities advised Wega Mining.
Pearson Acquires Wall Street English for $145M
Pearson, the UK media company, agreed to acquire Wall Street English, the Chinese English language training provider from Wall Street Institute for $145 million. Credit Suisse advised Wall Street English.
Wadia Group Acquires ABI Holdings For $179.8M
Wadia Group, an Indian comglomerate, acquired the remaining 50% of ABI Holdings, a UK biscuit manufacturing company, for $179.8 million. Icici Bank advised Wadia Group while Citigroup advised ABI Holdings.
SIPF, Capital Target Acquires Jih Sun Financial
SIPF, Capital Target and a private investor agreed to acquire a 34.2% stake in Jih Sun Financial, a Taiwanese financial services company, for 208 million EUR ($277.8 million). Goldman Sachs advised Jih Sun Financial.
France Telecom Takes 9.87% Stake in Sonatel
France Telecom acquired a 9.87% stake in Sonatel, the telecommunications company, from the Government of Senegal, for 235 million EUR. Lazard advised France Telecom; Rotschild advised Sonatel.
Blue Sparkle Acquires Barclays ishare for 3B GBP
Blue Sparkle, a UK affiliate of CVC Capital Partners, agreed to acquire the ishares business of Barclays for 3 billion GBP. The transaction will be financed with debt and equity. After the completion of the transaction, the ishares business will remain an asset management firm and the company will also retain its securities lending business. The deal is expected to close in the 3rd quarter of 2009. Deutchse Bank advised Blue Sparkle; Lazard, JPMorgan Cazenove, and William Fry advised Barclays ishare business.
Acadia Realty Trust Prices $68M Share Offering
Acadia Realty Trust (NYSE: AKR – “Acadia” or the “Company”), a real estate investment trust (“REIT”) announced today the pricing of its public offering of 5.0 million common shares of beneficial interest (“Common Shares”) at $11.95 per share.
The offering was increased in size from the originally contemplated 4.5 million Common Shares. The Company has granted the underwriters an option to purchase up to an additional 750,000 Common Shares during the next 30 days. The Company estimates that the net proceeds from this offering, before offering expenses, will be approximately $59.8 million or approximately $68.7 million if the underwriter’s option to purchase additional shares is exercised in full. The offering is expected to close on April 17, 2009, subject to customary closing conditions.
The book-running manager for this offering is Merrill Lynch & Co. The Co-Managers are J.P.Morgan, Barclays Capital, RBC Capital Markets and UBS Investment Bank.
The Company plans to use a portion of the net proceeds from the offering to reduce its indebtedness and the remaining net proceeds for general corporate purposes, which may include, among other things, further repayment of the Company’s debt, future acquisitions and redevelopments of, and capital improvements to, the Company’s properties.
The offering was increased in size from the originally contemplated 4.5 million Common Shares. The Company has granted the underwriters an option to purchase up to an additional 750,000 Common Shares during the next 30 days. The Company estimates that the net proceeds from this offering, before offering expenses, will be approximately $59.8 million or approximately $68.7 million if the underwriter’s option to purchase additional shares is exercised in full. The offering is expected to close on April 17, 2009, subject to customary closing conditions.
The book-running manager for this offering is Merrill Lynch & Co. The Co-Managers are J.P.Morgan, Barclays Capital, RBC Capital Markets and UBS Investment Bank.
The Company plans to use a portion of the net proceeds from the offering to reduce its indebtedness and the remaining net proceeds for general corporate purposes, which may include, among other things, further repayment of the Company’s debt, future acquisitions and redevelopments of, and capital improvements to, the Company’s properties.
Zhongwang Announces $1B Initial Public Offering
If successful, Zhongwang's IPO could be the first to raise more than $1 billion since China South Locomotive (1766.HK) (601766.SS) raised $1.57 billion last August.
It could also spur further listings. Dozens of companies put their planned Hong Kong listings on hold last year when the market for new offerings vanished.
"If this IPO makes it, we may see a pick-up in big IPO activity," Redford's Tang said.
Proceeds will be used to expand capacity and buy equipment, as well as for for working capital, debt repayment and research and development.
Global IPO volumes have dropped nearly 96 percent so far this year, according to Thomson Reuters data, but the market rally of recent weeks has led several companies to revive listing plans.
The world's biggest listing this year was the $828 million February IPO by Mead Johnson Nutrition Co (MJN.N).
The IPOs earlier this month by Silver Base and Chinese online gaming firm Changyou.com (CYOU.O), which listed on Nasdaq, both drew robust investor demand.
Hong Kong's Hang Seng index .HSI is up about 39 percent from an early March low, and trading volumes have surged in recent weeks, bolstering conditions for Zhongwang's big IPO.
"With more liquidity in the market at the moment, I think it's going to be okay," said Alfred Chan, chief dealer at Cheer Pearl Investment Ltd in Hong Kong. "Any new IPO in the near future should be okay."
Of the shares to be sold, 10 percent are earmarked for Hong Kong retail investors and the rest for institutions globally.
Citic Securities, JPMorgan (JPM.N) and UBS (UBSN.VX)(UBS.N) are handling the IPO.
It could also spur further listings. Dozens of companies put their planned Hong Kong listings on hold last year when the market for new offerings vanished.
"If this IPO makes it, we may see a pick-up in big IPO activity," Redford's Tang said.
Proceeds will be used to expand capacity and buy equipment, as well as for for working capital, debt repayment and research and development.
Global IPO volumes have dropped nearly 96 percent so far this year, according to Thomson Reuters data, but the market rally of recent weeks has led several companies to revive listing plans.
The world's biggest listing this year was the $828 million February IPO by Mead Johnson Nutrition Co (MJN.N).
The IPOs earlier this month by Silver Base and Chinese online gaming firm Changyou.com (CYOU.O), which listed on Nasdaq, both drew robust investor demand.
Hong Kong's Hang Seng index .HSI is up about 39 percent from an early March low, and trading volumes have surged in recent weeks, bolstering conditions for Zhongwang's big IPO.
"With more liquidity in the market at the moment, I think it's going to be okay," said Alfred Chan, chief dealer at Cheer Pearl Investment Ltd in Hong Kong. "Any new IPO in the near future should be okay."
Of the shares to be sold, 10 percent are earmarked for Hong Kong retail investors and the rest for institutions globally.
Citic Securities, JPMorgan (JPM.N) and UBS (UBSN.VX)(UBS.N) are handling the IPO.
Banco Pactual Sold By UBS For $2.5B
UBS AG (UBSN.VX) (UBS.N) is selling its Brazilian business back to its original owners for about $2.5 billion, boosting its capital despite a small loss and potentially cutting the need for a capital hike.
UBS, one of the European banks hit hardest by the credit crisis, said the sale -- just three years after it bought Banco Pactual for $2.5 billion -- was part of its strategy to reduce its risk profile and strengthen its balance sheet.
Activist investor and former UBS chief executive Luqman Arnold called last year for UBS to sell the highly profitable Brazilian investment bank as part of a series of demands centred on refocusing the bank on wealth management. The Swiss bank is struggling to return to profitability and rebuild its brand after massive investments in risky U.S. assets forced it to write down billions and accept government backing.
UBS said the sale, which it hopes to close in mid-2009, will result in a small loss. It will give more details when it reports first-quarter results on May 5.
UBS shares were up 2.2 percent at 14.29 Swiss francs at 0738 GMT, outperforming a 0.6 percent firmer DJ Stoxx European banking index .SX7P.
"The transaction highlights the downsizing and re-alignment activity UBS is firmly showing," said Kepler Capital Markets analyst Mathias Bueeler. "There may be more transactions like this to follow."
Arnold, who said last month he was still trying to recover his 2.8 percent stake in UBS from the administrators of collapsed bank Lehman Brothers, has also called for the sale of UBS's Australasian business and its huge asset management unit.
Last week, the bank said it would post a first-quarter loss of nearly 2 billion Swiss francs ($1.73 billion), mainly due to writedowns and outflows at its prized wealth management unit and announced plans to cut another 11 percent of its staff.
BOOSTING THE CAPITAL BASE
New Chief Executive Oswald Gruebel, the former Credit Suisse (CSGN.VX) boss UBS brought out of retirement in February to try to end the bank's woes, said last week he would take steps to protect and strengthen UBS' capital base.
UBS said on Monday the sale of Pactual will strengthen its Tier 1 ratio, a measure of financial strength, by approximately 60 basis points. The bank's Tier 1 ratio fell to 10 percent at the end of March, from 11 percent at the end of 2008.
UBS said the deal would increase its Tier 1 capital by 1.3 billion Swiss francs, decrease risk weighted assets by 3.0 billion francs, and reduce total assets by 6.3 billion francs.
Vontobel analyst Teresa Nielsen said the sale would release a large amount of goodwill which was the reason for the big fall in risk weighted assets and the Tier 1 capital increase.
"Hence, we believe it ensures there will be no need for a capital increase," she said.
The founding partners of BTG, headed by Andre Esteves, built up investment bank Banco Pactual before selling out to UBS in 2006. The two companies then worked together for two years integrating the businesses, according to BTG.
There had been speculation in the last year that Esteves, made one of the wealthiest people in Brazil by the Pactual sale, might want to buy back the bank, Brazil's seventh largest asset manager and one of the leading underwriters of stock issues in Latin America's largest economy.
Esteves, a former global head of fixed income, currencies and commodities for UBS, founded BTG shortly after stepping down as chairman and CEO of UBS' Latin America unit in June 2008
UBS, one of the European banks hit hardest by the credit crisis, said the sale -- just three years after it bought Banco Pactual for $2.5 billion -- was part of its strategy to reduce its risk profile and strengthen its balance sheet.
Activist investor and former UBS chief executive Luqman Arnold called last year for UBS to sell the highly profitable Brazilian investment bank as part of a series of demands centred on refocusing the bank on wealth management. The Swiss bank is struggling to return to profitability and rebuild its brand after massive investments in risky U.S. assets forced it to write down billions and accept government backing.
UBS said the sale, which it hopes to close in mid-2009, will result in a small loss. It will give more details when it reports first-quarter results on May 5.
UBS shares were up 2.2 percent at 14.29 Swiss francs at 0738 GMT, outperforming a 0.6 percent firmer DJ Stoxx European banking index .SX7P.
"The transaction highlights the downsizing and re-alignment activity UBS is firmly showing," said Kepler Capital Markets analyst Mathias Bueeler. "There may be more transactions like this to follow."
Arnold, who said last month he was still trying to recover his 2.8 percent stake in UBS from the administrators of collapsed bank Lehman Brothers, has also called for the sale of UBS's Australasian business and its huge asset management unit.
Last week, the bank said it would post a first-quarter loss of nearly 2 billion Swiss francs ($1.73 billion), mainly due to writedowns and outflows at its prized wealth management unit and announced plans to cut another 11 percent of its staff.
BOOSTING THE CAPITAL BASE
New Chief Executive Oswald Gruebel, the former Credit Suisse (CSGN.VX) boss UBS brought out of retirement in February to try to end the bank's woes, said last week he would take steps to protect and strengthen UBS' capital base.
UBS said on Monday the sale of Pactual will strengthen its Tier 1 ratio, a measure of financial strength, by approximately 60 basis points. The bank's Tier 1 ratio fell to 10 percent at the end of March, from 11 percent at the end of 2008.
UBS said the deal would increase its Tier 1 capital by 1.3 billion Swiss francs, decrease risk weighted assets by 3.0 billion francs, and reduce total assets by 6.3 billion francs.
Vontobel analyst Teresa Nielsen said the sale would release a large amount of goodwill which was the reason for the big fall in risk weighted assets and the Tier 1 capital increase.
"Hence, we believe it ensures there will be no need for a capital increase," she said.
The founding partners of BTG, headed by Andre Esteves, built up investment bank Banco Pactual before selling out to UBS in 2006. The two companies then worked together for two years integrating the businesses, according to BTG.
There had been speculation in the last year that Esteves, made one of the wealthiest people in Brazil by the Pactual sale, might want to buy back the bank, Brazil's seventh largest asset manager and one of the leading underwriters of stock issues in Latin America's largest economy.
Esteves, a former global head of fixed income, currencies and commodities for UBS, founded BTG shortly after stepping down as chairman and CEO of UBS' Latin America unit in June 2008
Glaxo To Acquire Stiefel Labs For $3.6B
GlaxoSmithKline Plc is to buy privately owned Stiefel Laboratories Inc for up to $3.6 billion to diversify its business by adding treatments for acne, dermatitis and other skin complaints.
The U.S. acquisition is the latest in a string of deals in the drugs sector, but is significantly smaller than recent mega-mergers, reflecting the British-based group's declared focus on bolt-on buys.
Stiefel, part-owned by buyout firm Blackstone Group, is the world's largest independent dermatology company, with a range of prescription and over-the-counter products.
It was put up for sale a month ago and attracted interest from a number of large pharmaceutical companies, including Novartis AG, Sanofi-Aventis SA and Johnson & Johnson, according to people familiar with the matter.
Glaxo, the world's second-largest drugmaker, is paying $2.9 billion in cash for Stiefel and will take on about $400 million of Stiefel's debt. A further $300 million cash payment is contingent on future performance, the companies said on Monday.
That overall price is four times Stiefel's 2008 sales of around $900 million, but the British group expects to extract substantial savings from merging the business, which will retain the Stiefel identity, into its structure.
Glaxo expects annual pre-tax cost savings of up to $240 million by 2012, with integration costs of some $325 million over the next three years.
Excluding those costs, the deal will dilute Glaxo's earnings per share by less than 1 percent in 2009 and be 1 percent to 2 percent earnings accretive to EPS in 2010.
DERMATOLOGY TREBLES
The purchase will nearly treble the size of Glaxo's skincare business, giving it an 8 percent share of the global prescription dermatology market.
"It's an opportunity for Glaxo to strengthen its product mix," said Navid Malik, industry analyst at Matrix Corporate Capital. "This business should be very complementary."
Glaxo shares were 1.2 percent higher at 10.51 pounds by 1057 GMT, outperforming a 0.7 percent gain in the European healthcare sector.
Deutsche Bank analysts said the deal was not particularly cheap, but the four times trailing revenue paid was below the 4.6 times average of major drugs deals in recent years and there could be potential for significant revenue synergies.
Founded in Germany in 1847, Stiefel is based in Coral Gables, Florida, and produces a range of skin treatments including Duac, for acne, and Olux E, for dermatitis.
The purchase fits with the strategy of Glaxo Chief Executive Andrew Witty, who wants to broaden the focus of the group away from its traditional reliance on small-molecule prescription medicines -- or pills.
Witty has already struck several smaller deals to build Glaxo's presence in emerging markets, and last week signed a deal with Pfizer Inc to merge their HIV operations into a new company, which will be 85 percent-owned by Glaxo.
He has rejected the idea of a large-scale deal, along the lines of Pfizer's $68 billion purchase of Wyeth or Merck & Co Inc's $41 billion acquisition of Schering-Plough Corp. But analysts expect him to buy more smaller companies in consumer health, vaccines, biotech and emerging markets in a drive to reduce Glaxo's risk profile.
Stiefel is controlled by the founding Stiefel family and current CEO Charles Stiefel will continue to lead the enlarged dermatology business under the Glaxo umbrella after the deal closes in the third quarter of 2009.
Private-equity group Blackstone, which invested $500 million in the company in 2007 to take a substantial minority stake, advised Stiefel on the sale. Glaxo was advised by Lazard.
The U.S. acquisition is the latest in a string of deals in the drugs sector, but is significantly smaller than recent mega-mergers, reflecting the British-based group's declared focus on bolt-on buys.
Stiefel, part-owned by buyout firm Blackstone Group, is the world's largest independent dermatology company, with a range of prescription and over-the-counter products.
It was put up for sale a month ago and attracted interest from a number of large pharmaceutical companies, including Novartis AG, Sanofi-Aventis SA and Johnson & Johnson, according to people familiar with the matter.
Glaxo, the world's second-largest drugmaker, is paying $2.9 billion in cash for Stiefel and will take on about $400 million of Stiefel's debt. A further $300 million cash payment is contingent on future performance, the companies said on Monday.
That overall price is four times Stiefel's 2008 sales of around $900 million, but the British group expects to extract substantial savings from merging the business, which will retain the Stiefel identity, into its structure.
Glaxo expects annual pre-tax cost savings of up to $240 million by 2012, with integration costs of some $325 million over the next three years.
Excluding those costs, the deal will dilute Glaxo's earnings per share by less than 1 percent in 2009 and be 1 percent to 2 percent earnings accretive to EPS in 2010.
DERMATOLOGY TREBLES
The purchase will nearly treble the size of Glaxo's skincare business, giving it an 8 percent share of the global prescription dermatology market.
"It's an opportunity for Glaxo to strengthen its product mix," said Navid Malik, industry analyst at Matrix Corporate Capital. "This business should be very complementary."
Glaxo shares were 1.2 percent higher at 10.51 pounds by 1057 GMT, outperforming a 0.7 percent gain in the European healthcare sector.
Deutsche Bank analysts said the deal was not particularly cheap, but the four times trailing revenue paid was below the 4.6 times average of major drugs deals in recent years and there could be potential for significant revenue synergies.
Founded in Germany in 1847, Stiefel is based in Coral Gables, Florida, and produces a range of skin treatments including Duac, for acne, and Olux E, for dermatitis.
The purchase fits with the strategy of Glaxo Chief Executive Andrew Witty, who wants to broaden the focus of the group away from its traditional reliance on small-molecule prescription medicines -- or pills.
Witty has already struck several smaller deals to build Glaxo's presence in emerging markets, and last week signed a deal with Pfizer Inc to merge their HIV operations into a new company, which will be 85 percent-owned by Glaxo.
He has rejected the idea of a large-scale deal, along the lines of Pfizer's $68 billion purchase of Wyeth or Merck & Co Inc's $41 billion acquisition of Schering-Plough Corp. But analysts expect him to buy more smaller companies in consumer health, vaccines, biotech and emerging markets in a drive to reduce Glaxo's risk profile.
Stiefel is controlled by the founding Stiefel family and current CEO Charles Stiefel will continue to lead the enlarged dermatology business under the Glaxo umbrella after the deal closes in the third quarter of 2009.
Private-equity group Blackstone, which invested $500 million in the company in 2007 to take a substantial minority stake, advised Stiefel on the sale. Glaxo was advised by Lazard.
PepsiCo Buys Bottling Group For $6B
Soft-drink maker PepsiCo offered about $6 billion on Monday to buy the shares it does not already own in its two largest bottlers, Pepsi Bottling Group and PepsiAmericas, to cut costs and secure control of its brands as growth switches to new non-carbonated drinks.
The U.S. company's plan to consolidate its bottling business underlines an industry trend and would give it control of 80 percent of its North America beverage distribution volume. PepsiCo also reported better-than-expected quarterly earnings.
"Both Pepsi and Coke need control over their routes to market given the slow growth and premium that is placed on getting new brands to market," said John Sicher, editor and publisher of industry publication Beverage Digest.
"It is also imperative for Pepsi and Coke that they have as many of their own brands carried by their bottlers as possible".
PepsiCo (PEP.N) said it was offering $29.50 per share in cash and stock for The Pepsi Bottling Group (PBG.N) and $23.27 per share for PepsiAmericas (PAS.N), representing a 17.1 percent premium to Friday's close.
The offers consist of $14.75 in cash plus 0.283 shares of PepsiCo common stock for each share of Pepsi Bottling, and $11.64 in cash plus 0.223 shares of PepsiCo for each share of PepsiAmericas.
"Non-carbonated drinks, which have different economics and different distribution systems than carbonated soft drinks, have become a much bigger factor in the industry and in our own portfolio," PepsiCo Chief Executive Officer Indra Nooyi said in a statement, adding that the deal will improve its competitiveness and growth prospects.
"The main driver of this deal would appear to be synergies which are estimated to be over $200 million pre-tax and include: reducing redundancy costs, scale efficiencies and realising new revenue opportunities," said Citi analyst Philip Morrisey.
PepsiCo said it expects the deal to add to its earnings by at least 15 cents a share with the synergies.
"PepsiCo's decision to purchase the outstanding stock of the Pepsi Bottling Group is likely to be received well by the market, especially after reporting positive quarterly earnings," Manoj Ladwa, senior trader at ETX Capital in London said, adding that deal will increase PepsiCo's hold on the beverage distribution market.
Pepsi Bottling said it will evaluate PepsiCo's proposal. The bottler was spun off from PepsiCo in 1999 and according to its website, Pepsi Bottling accounts for more than half of the Pepsi-Cola beverages sold in North America and about 40 percent of the Pepsi-Cola beverages worldwide.
According to a regulatory filing with the U.S. Securities and Exchange Commission, as of Feb. 13, PepsiCo's ownership in Pepsi Bottling represented 33.1 percent of the outstanding common stock and 100 percent of the outstanding Class B common stock.
PepsiAmericas advised shareholders to take no action pending review of the proposal by its board.
According to a regulatory filing, PepsiCo owns about 54 million shares in PepsiAmericas, or 43.2 percent of common stock, as of March 10. PepsiAmericas accounts for about 19 percent of all PepsiCo beverage products sold in the U.S.
In some territories, the company sells and distributes products under brands licensed by companies other than PepsiCo. PepsiCo-related revenue accounted for about 80 percent of its total net sales in fiscal year 2008.
RESULTS BEAT STREET
PepsiCo also reported better-than-expected quarterly results and reaffirmed its outlook for the year. The outlook did not include the impact of the proposed bids for its bottlers.
PepsiCo said its reported earnings per share grew 3 percent, while net revenue fell 1 percent to $8.26 billion.
The company's core earnings were $1.11 billion, or 71 cents a share, for the quarter, while analysts, on average, were expecting the soft drinks maker to earn 67 cents a share, according to Reuters Estimates.
Shares of PepsiCo closed at $52.13 on Friday on the New York Stock Exchange. Pepsi Bottling shares closed at $25.20, while Pepsi Americas shares closed at $19.88.
PepsiCo's financial advisors for the deal were Centerview Partners, Banc of America Securities and Merrill Lynch.
The U.S. company's plan to consolidate its bottling business underlines an industry trend and would give it control of 80 percent of its North America beverage distribution volume. PepsiCo also reported better-than-expected quarterly earnings.
"Both Pepsi and Coke need control over their routes to market given the slow growth and premium that is placed on getting new brands to market," said John Sicher, editor and publisher of industry publication Beverage Digest.
"It is also imperative for Pepsi and Coke that they have as many of their own brands carried by their bottlers as possible".
PepsiCo (PEP.N) said it was offering $29.50 per share in cash and stock for The Pepsi Bottling Group (PBG.N) and $23.27 per share for PepsiAmericas (PAS.N), representing a 17.1 percent premium to Friday's close.
The offers consist of $14.75 in cash plus 0.283 shares of PepsiCo common stock for each share of Pepsi Bottling, and $11.64 in cash plus 0.223 shares of PepsiCo for each share of PepsiAmericas.
"Non-carbonated drinks, which have different economics and different distribution systems than carbonated soft drinks, have become a much bigger factor in the industry and in our own portfolio," PepsiCo Chief Executive Officer Indra Nooyi said in a statement, adding that the deal will improve its competitiveness and growth prospects.
"The main driver of this deal would appear to be synergies which are estimated to be over $200 million pre-tax and include: reducing redundancy costs, scale efficiencies and realising new revenue opportunities," said Citi analyst Philip Morrisey.
PepsiCo said it expects the deal to add to its earnings by at least 15 cents a share with the synergies.
"PepsiCo's decision to purchase the outstanding stock of the Pepsi Bottling Group is likely to be received well by the market, especially after reporting positive quarterly earnings," Manoj Ladwa, senior trader at ETX Capital in London said, adding that deal will increase PepsiCo's hold on the beverage distribution market.
Pepsi Bottling said it will evaluate PepsiCo's proposal. The bottler was spun off from PepsiCo in 1999 and according to its website, Pepsi Bottling accounts for more than half of the Pepsi-Cola beverages sold in North America and about 40 percent of the Pepsi-Cola beverages worldwide.
According to a regulatory filing with the U.S. Securities and Exchange Commission, as of Feb. 13, PepsiCo's ownership in Pepsi Bottling represented 33.1 percent of the outstanding common stock and 100 percent of the outstanding Class B common stock.
PepsiAmericas advised shareholders to take no action pending review of the proposal by its board.
According to a regulatory filing, PepsiCo owns about 54 million shares in PepsiAmericas, or 43.2 percent of common stock, as of March 10. PepsiAmericas accounts for about 19 percent of all PepsiCo beverage products sold in the U.S.
In some territories, the company sells and distributes products under brands licensed by companies other than PepsiCo. PepsiCo-related revenue accounted for about 80 percent of its total net sales in fiscal year 2008.
RESULTS BEAT STREET
PepsiCo also reported better-than-expected quarterly results and reaffirmed its outlook for the year. The outlook did not include the impact of the proposed bids for its bottlers.
PepsiCo said its reported earnings per share grew 3 percent, while net revenue fell 1 percent to $8.26 billion.
The company's core earnings were $1.11 billion, or 71 cents a share, for the quarter, while analysts, on average, were expecting the soft drinks maker to earn 67 cents a share, according to Reuters Estimates.
Shares of PepsiCo closed at $52.13 on Friday on the New York Stock Exchange. Pepsi Bottling shares closed at $25.20, while Pepsi Americas shares closed at $19.88.
PepsiCo's financial advisors for the deal were Centerview Partners, Banc of America Securities and Merrill Lynch.
Friday, April 17, 2009
Collective Media Closes $20M Series B Financing
Online advertising network Collective Media Inc. said Monday, April 13, it has closed a $20 million Series B round led by Accel Partners.
Founded in 2005, New York-based Collective works with major brands, including Coca-Cola Co., General Motors Corp. and Home Depot Inc., to place ads on popular Web sites published by Gannett Co., Hearst Corp., Tribune Co. and others. Previously, Collective raised an aggregate $3.5 million via a 2006 angel round and a 2007 Series A round led by Greycroft Partners LLC with participation from iNovia Capital. INovia also is participating in the new round.
Collective said it will use the new capital to develop its technology, expand internationally and possibly make some acquisitions. Last year, Collective bought Personifi, which makes semantic software that analyzes key words.
While Collective faces competition from much larger players, such as Microsoft Corp., Time Warner Inc.'s AOL, Google Inc. and Yahoo! Inc., the startup's growth is impressive. According to CEO Joe Apprendi, the company's revenue grew 200% last year.
"People say the display market is flat or slowing," said Apprendi. "But there's a shift in how money is being spent from targeting premium sites to targeting specific audiences across sites. Collective marries the who with the where."
ComScore Inc. now ranks Collective the 19th-largest ad network in the U.S., up from 21st last year.
"The ComScore rankings are interesting," said Accel Partners partner Sameer Gandhi. "But what's hidden is that the company is very focused on the high-end, or premium, part of the display ad market. In that particular area, where they sell much more targeted solutions based on their 'AMP' platform, they are growing extremely rapidly, and that's the fastest-growing segment of the market."
The difference between Collective and dozens of other ad networks is that its approach is "audience-centric versus site-centric," said Gandhi, who has joined Collective's board.
The investment in Collective is the first for Accel's $480 million Growth Equity Fund, which closed in December. Accel is best known for taking an early stake in social networking platform Facebook Inc. The firm, which has offices in Palo Alto, Calif., London and Bangalore, India, holds stakes in real estate site Trulia Inc., mobile advertising marketplace AdMob Inc. and online video distributor Brightcove Inc. Past exits include RealNetworks Inc., Foundry Networks Inc. and Macromedia Inc.
Another online ad company, the Rubicon Project, also announced funding Monday. Rubicon added $13 million in venture funding, bringing total financial investments to $33 million. The follow-on round includes $5 million in venture funding from existing investors Clearstone Venture Partners, Mayfield Fund and IDG Ventures Asia, and $8 million in venture debt from Silicon Valley Bank. The funding will fuel business growth initiatives including strategic acquisitions, research and development, infrastructure and international expansion, the company said.
Founded in 2005, New York-based Collective works with major brands, including Coca-Cola Co., General Motors Corp. and Home Depot Inc., to place ads on popular Web sites published by Gannett Co., Hearst Corp., Tribune Co. and others. Previously, Collective raised an aggregate $3.5 million via a 2006 angel round and a 2007 Series A round led by Greycroft Partners LLC with participation from iNovia Capital. INovia also is participating in the new round.
Collective said it will use the new capital to develop its technology, expand internationally and possibly make some acquisitions. Last year, Collective bought Personifi, which makes semantic software that analyzes key words.
While Collective faces competition from much larger players, such as Microsoft Corp., Time Warner Inc.'s AOL, Google Inc. and Yahoo! Inc., the startup's growth is impressive. According to CEO Joe Apprendi, the company's revenue grew 200% last year.
"People say the display market is flat or slowing," said Apprendi. "But there's a shift in how money is being spent from targeting premium sites to targeting specific audiences across sites. Collective marries the who with the where."
ComScore Inc. now ranks Collective the 19th-largest ad network in the U.S., up from 21st last year.
"The ComScore rankings are interesting," said Accel Partners partner Sameer Gandhi. "But what's hidden is that the company is very focused on the high-end, or premium, part of the display ad market. In that particular area, where they sell much more targeted solutions based on their 'AMP' platform, they are growing extremely rapidly, and that's the fastest-growing segment of the market."
The difference between Collective and dozens of other ad networks is that its approach is "audience-centric versus site-centric," said Gandhi, who has joined Collective's board.
The investment in Collective is the first for Accel's $480 million Growth Equity Fund, which closed in December. Accel is best known for taking an early stake in social networking platform Facebook Inc. The firm, which has offices in Palo Alto, Calif., London and Bangalore, India, holds stakes in real estate site Trulia Inc., mobile advertising marketplace AdMob Inc. and online video distributor Brightcove Inc. Past exits include RealNetworks Inc., Foundry Networks Inc. and Macromedia Inc.
Another online ad company, the Rubicon Project, also announced funding Monday. Rubicon added $13 million in venture funding, bringing total financial investments to $33 million. The follow-on round includes $5 million in venture funding from existing investors Clearstone Venture Partners, Mayfield Fund and IDG Ventures Asia, and $8 million in venture debt from Silicon Valley Bank. The funding will fuel business growth initiatives including strategic acquisitions, research and development, infrastructure and international expansion, the company said.
Weingarten Realty Prices $458M Equity Offering
Weingarten Realty Investors (NYSE: WRI - News) today announced the pricing of its public offering of 28,000,000 common shares at a price to public of $14.25 per share. The company has granted the underwriters an option to purchase up to an additional 4,200,000 shares.
Merrill Lynch & Co. and J.P.Morgan are acting as joint book-running managers for the offering. RBC Capital Markets and Wachovia Securities are acting as joint lead managers. Robert W. Baird & Co., BBVA Securities, J.J.B. Hilliard, W.L. Lyons, LLC and Stifel Nicolaus are acting as co-managers. Subject to customary conditions, the offering is expected to close on or about April 22, 2009.
The company intends to use the net proceeds from the sale of the common shares, which are expected to be approximately $381.9 million (without giving effect to any exercise of the underwriters' option to purchase additional shares), to reduce borrowings outstanding on its revolving credit facility and for general corporate purposes, including the repayment or repurchase of outstanding indebtedness.
Merrill Lynch & Co. and J.P.Morgan are acting as joint book-running managers for the offering. RBC Capital Markets and Wachovia Securities are acting as joint lead managers. Robert W. Baird & Co., BBVA Securities, J.J.B. Hilliard, W.L. Lyons, LLC and Stifel Nicolaus are acting as co-managers. Subject to customary conditions, the offering is expected to close on or about April 22, 2009.
The company intends to use the net proceeds from the sale of the common shares, which are expected to be approximately $381.9 million (without giving effect to any exercise of the underwriters' option to purchase additional shares), to reduce borrowings outstanding on its revolving credit facility and for general corporate purposes, including the repayment or repurchase of outstanding indebtedness.
Aerovance Closes On $38M 3rd Round Funding
Aerovance, a developer of asthma medications, has received $38 million in a post-recapitalized third round of financing, VentureBeat said.
The round, which gives the company $20 million up front, with the option of claiming the remaining $18 million as necessary, was led by ProQuest Investments. Other investors included BB Biotech Ventures, Alta Partners and Apax Partners.
The round, which gives the company $20 million up front, with the option of claiming the remaining $18 million as necessary, was led by ProQuest Investments. Other investors included BB Biotech Ventures, Alta Partners and Apax Partners.
Thursday, April 16, 2009
StatoilHydro Announces $2B Note Sale In 2 Tranches
Norwegian oil and gas company StatoilHydro (STL.OL) on Thursday launched its $2 billion two-part note sale, said IFR, a Thomson Reuters service.
The sale includes $500 million of five-year notes launched at 220 basis points more than comparable U.S. Treasuries and $1.5 billion of 10-year notes launched at 245 basis points over Treasuries.
Banc of America, Citigroup and JP Morgan are the joint lead managers of the sale, said IFR.
The sale includes $500 million of five-year notes launched at 220 basis points more than comparable U.S. Treasuries and $1.5 billion of 10-year notes launched at 245 basis points over Treasuries.
Banc of America, Citigroup and JP Morgan are the joint lead managers of the sale, said IFR.
DryShips Completes $500M Equity Offering
Greek dry bulk carrier DryShips Inc (DRYS.O) said it has completed its at-the-market equity offering of $500 million, strengthening its balance sheet and helping the company to reduce debt, sending its shares up 5 percent.
DryShips said it now has about 184.8 million common shares outstanding. The company's market capitalization now stands at about $1.02 billion, based on the stock's Thursday closing price of $5.55.
Earlier, analysts were sceptical about what the exact number of shares outstanding would be after DryShips had announced the offering back in January.
"We believe the primary equity that we have raised has significantly improved our balance sheet and liquidity, and will enable us to continue reducing our debt obligations," Chief Executive George Economou said in a statement.
DryShips said it now has about 184.8 million common shares outstanding. The company's market capitalization now stands at about $1.02 billion, based on the stock's Thursday closing price of $5.55.
Earlier, analysts were sceptical about what the exact number of shares outstanding would be after DryShips had announced the offering back in January.
"We believe the primary equity that we have raised has significantly improved our balance sheet and liquidity, and will enable us to continue reducing our debt obligations," Chief Executive George Economou said in a statement.
Harris Corp Agrees To Acquire Tyco Elec Wireless Unit
Communications equipment maker Harris Corp (HRS.N) said on Thursday it agreed to buy Tyco Electronics Ltd's (TYC.N) wireless systems business for $675 million in cash.
The business, which provides wireless communications systems for law enforcement, fire and rescue, and public service organizations, had $461 million in sales in 2008.
Harris said it will combine the Tyco wireless systems business with its Harris RF Communications unit.
The deal, which could be subject to working capital adjustments, is expected to close this summer. Morgan Stanley and Jones Day advised Harris, while Barclays Capital and law firm Davis Polk advised Tyco Electronics.
Tyco Electronics also forecast an operating loss for the quarter ended March 27 of $3.6 billion to $4.1 billion, including a more than $3.3 billion goodwill impairment charge due to significant sales and earnings declines. Excluding items, it expects operating earnings of $75 million in the quarter.
Tycol Electronics also said sales for the quarter were $2.46 billion, roughly in line with analyst estimates.
The business, which provides wireless communications systems for law enforcement, fire and rescue, and public service organizations, had $461 million in sales in 2008.
Harris said it will combine the Tyco wireless systems business with its Harris RF Communications unit.
The deal, which could be subject to working capital adjustments, is expected to close this summer. Morgan Stanley and Jones Day advised Harris, while Barclays Capital and law firm Davis Polk advised Tyco Electronics.
Tyco Electronics also forecast an operating loss for the quarter ended March 27 of $3.6 billion to $4.1 billion, including a more than $3.3 billion goodwill impairment charge due to significant sales and earnings declines. Excluding items, it expects operating earnings of $75 million in the quarter.
Tycol Electronics also said sales for the quarter were $2.46 billion, roughly in line with analyst estimates.
AIG To Sell Auto Ins Unit To Zurich Financial
American International Group Inc (AIG.N) is expected to announce the sale of its U.S. auto insurance unit to Zurich Financial Services AG (ZURN.VX) later on Thursday, a source familiar with the deal said.
The price of the AIG unit is expected to be between $1.5 billion and $2 billion, but closer to the higher end of the range, the source said.
The deal is expected to be for all of AIG's personal auto group and will go to Zurich's Farmers Group Inc, the source said.
Zurich, the fourth-largest European insurer, has a growing presence in the United States through Farmers insurance units, which it manages but does not own. Other U.S. operations include Zurich North America Commercial and Zurich Global Corporate, North America.
The auto insurance business is part of AIG's U.S. personal lines unit, which also includes selling products to high net- worth individuals through its AIG Private Client division. AIG Chief Executive Edward Liddy previously said the private client division is not being sold.
U.S. taxpayers have taken a roughly 80 percent stake in AIG, once the world's largest insurer, in exchange for providing up to $180 billion in financial support.
The company is trying to ditch assets in a bid to pay back the government, but has struggled to find buyers for big-ticket items.
The price of the AIG unit is expected to be between $1.5 billion and $2 billion, but closer to the higher end of the range, the source said.
The deal is expected to be for all of AIG's personal auto group and will go to Zurich's Farmers Group Inc, the source said.
Zurich, the fourth-largest European insurer, has a growing presence in the United States through Farmers insurance units, which it manages but does not own. Other U.S. operations include Zurich North America Commercial and Zurich Global Corporate, North America.
The auto insurance business is part of AIG's U.S. personal lines unit, which also includes selling products to high net- worth individuals through its AIG Private Client division. AIG Chief Executive Edward Liddy previously said the private client division is not being sold.
U.S. taxpayers have taken a roughly 80 percent stake in AIG, once the world's largest insurer, in exchange for providing up to $180 billion in financial support.
The company is trying to ditch assets in a bid to pay back the government, but has struggled to find buyers for big-ticket items.
Fusion-io Inc Raises $47.5M In Series B Funding
Fusion-io Inc., which has developed a next-generation enterprise storage device, announced Tuesday, April 7, a $47.5 million Series B round led by new investor Lightspeed Venture Partners.
The funding brought back investors from the startup's $19 million Series A round, which closed a little more than a year ago. They include New Enterprise Associates, Dell Inc.'s venture arm Dell Ventures and Sumitomo Ventures. Fusion-io also said Lightspeed managing director Chris Schaepe and the company's chief marketing officer Rick White have joined its board.
Fusion-io founder and chief technology officer David Flynn said other strategic investors were involved in the round, but he declined to identify them.
The Salt Lake City-based company, which was founded in 2006, has developed a device called the ioDrive that plugs into a server slot using PCI Express interconnect technology and employs NAND flash memory — the same kind used in MP3 players and, increasingly, cell phones.
The technology is small, fast, simple to install and gaining acceptance among major server and storage companies, including Hewlett-Packard Co., which last month inked an original equipment manufacturer agreement with Fusion-io to use its storage technology in HP blade servers.
The latest funding round represented an increase in valuation for Fusion-io and was oversubscribed, Flynn said. The size of the investment and the fact that it followed the first round so closely stemmed not only from the high cost of developing storage componentry, but also from the speed with which the market for solid-state enterprise storage is expanding, he said.
"The market forces that are driving the adoption of this technology are accelerating; there's going to be a land grab," he said. "We have a leadership position now, and we want to capitalize on it by expanding in the market. It seemed like a good risk to take."
Other companies are attempting to emulate Fusion-io's take on enterprise storage, Flynn added. Texas Memory Systems Inc., a 31-year-old Houston memory chipmaker, recently changed its business model to offer plug-in, Flash-based drives, Flynn said. However, he argued that most competitors are bundling many traditional components onto one plug-in card, and therefore can't achieve the speed or simplicity of Fusion-io's product.
"They are missing the main point of getting rid of the disk controller and other infrastructure," Flynn said. "That requires rethinking the technology from start to end."
Along with announcing new backing, the company said that it has tapped David Bradford to be its new CEO, replacing Donald Basile after just a year in that position. Basile was brought on as Fusion-io's founding chairman and subsequently tapped to take the reins of the company during its rapid expansion between its first and second venture rounds, Flynn said. Bradford was hired to "drive us through a new stage," he said.
"Different stages of expansion require different personalities and skill sets," Flynn said.
Bradford most recently has been working in an advisory role with a variety of startups, but from 1985 through 2000 he was senior vice president and general counsel at Novell Inc. During his last three years at the Waltham, Mass.-based enterprise software company, he reported to then-CEO Eric Schmidt, who is now at the helm of Google Inc. of Mountain View, Calif.
Bradford played a critical role in hiring Apple Inc. co-founder Steve Wozniak as Fusion-io's chief scientist in February, Flynn said.
For legal counsel on the round, Fusion-io retained O'Melveny & Meyers LLP's Warren Lazarow.
The funding brought back investors from the startup's $19 million Series A round, which closed a little more than a year ago. They include New Enterprise Associates, Dell Inc.'s venture arm Dell Ventures and Sumitomo Ventures. Fusion-io also said Lightspeed managing director Chris Schaepe and the company's chief marketing officer Rick White have joined its board.
Fusion-io founder and chief technology officer David Flynn said other strategic investors were involved in the round, but he declined to identify them.
The Salt Lake City-based company, which was founded in 2006, has developed a device called the ioDrive that plugs into a server slot using PCI Express interconnect technology and employs NAND flash memory — the same kind used in MP3 players and, increasingly, cell phones.
The technology is small, fast, simple to install and gaining acceptance among major server and storage companies, including Hewlett-Packard Co., which last month inked an original equipment manufacturer agreement with Fusion-io to use its storage technology in HP blade servers.
The latest funding round represented an increase in valuation for Fusion-io and was oversubscribed, Flynn said. The size of the investment and the fact that it followed the first round so closely stemmed not only from the high cost of developing storage componentry, but also from the speed with which the market for solid-state enterprise storage is expanding, he said.
"The market forces that are driving the adoption of this technology are accelerating; there's going to be a land grab," he said. "We have a leadership position now, and we want to capitalize on it by expanding in the market. It seemed like a good risk to take."
Other companies are attempting to emulate Fusion-io's take on enterprise storage, Flynn added. Texas Memory Systems Inc., a 31-year-old Houston memory chipmaker, recently changed its business model to offer plug-in, Flash-based drives, Flynn said. However, he argued that most competitors are bundling many traditional components onto one plug-in card, and therefore can't achieve the speed or simplicity of Fusion-io's product.
"They are missing the main point of getting rid of the disk controller and other infrastructure," Flynn said. "That requires rethinking the technology from start to end."
Along with announcing new backing, the company said that it has tapped David Bradford to be its new CEO, replacing Donald Basile after just a year in that position. Basile was brought on as Fusion-io's founding chairman and subsequently tapped to take the reins of the company during its rapid expansion between its first and second venture rounds, Flynn said. Bradford was hired to "drive us through a new stage," he said.
"Different stages of expansion require different personalities and skill sets," Flynn said.
Bradford most recently has been working in an advisory role with a variety of startups, but from 1985 through 2000 he was senior vice president and general counsel at Novell Inc. During his last three years at the Waltham, Mass.-based enterprise software company, he reported to then-CEO Eric Schmidt, who is now at the helm of Google Inc. of Mountain View, Calif.
Bradford played a critical role in hiring Apple Inc. co-founder Steve Wozniak as Fusion-io's chief scientist in February, Flynn said.
For legal counsel on the round, Fusion-io retained O'Melveny & Meyers LLP's Warren Lazarow.
Rosetta Stone Prices $112M IPO Above Range
Foreign language software company Rosetta Stone Inc. priced its initial public offering Wednesday, April 15, above its expected range, raising $112.5 million in the second IPO this week.
The Arlington, Va. company sold 6.25 million shares at $18 apiece – above its expected range of $15 to $17 per share. Rosetta Stone sold 3.125 million shares itself, with selling shareholders offering the balance.
The company expects to begin trade on the New York Stock Exchange Thursday under the symbol RST.
Rosetta Stone is the first IPO to price above its range in nearly a year, MarketWatch noted, with fluid handling systems maker Colfax Corp. being the last to do so in May 2008.
Morgan Stanley and William Blair & Co. LLC are joint book-running managers for the Rosetta Stone offering. Jefferies & Co., Piper Jaffray & Co. and Robert W. Baird & Co. Inc. are co-managers. The underwriters have an overallotment option of 937,500 shares. Fulbright & Jaworski LLP's Brian Fenske is issuer's counsel Cooley Godward Kronish LLP's Brent Siler is underwriters' counsel.
"As a provider of educational software, Rosetta Stone is more resilient to economic slumps than many other software firms," Morningstar analyst Brady Lemos said in a note Wednesday. The note said 20% of sales come from institutional customers, making for somewhat more reliable revenue streams. However, the company's long-term prospects, Lemos said, "hinge on its ability to adapt to competitive threats and consumer tastes."
Rosetta Stone, which sells software, online resources and practice tools for learning 31 languages, marks the second offering this week and the fourth this year.
On Wednesday, San Diego-based online college Bridgepoint Education Inc. debuted on the NYSE, opening at $10.50 per share, its IPO price, which fell below its expected $14 to $16 range. Shares ended trade Wednesday at $11.10.
In the other debuts this year, Chinese online video game company Changyou.com Ltd., a spinoff of Web portal Sohu.com Inc., staged its IPO on the Nasdaq two weeks ago and Mead Johnson Nutrition Co., Bristol-Myers Squibb Co.'s infant formula division, went public on the NYSE in February. Both companies priced at the top of their respective ranges.
The Arlington, Va. company sold 6.25 million shares at $18 apiece – above its expected range of $15 to $17 per share. Rosetta Stone sold 3.125 million shares itself, with selling shareholders offering the balance.
The company expects to begin trade on the New York Stock Exchange Thursday under the symbol RST.
Rosetta Stone is the first IPO to price above its range in nearly a year, MarketWatch noted, with fluid handling systems maker Colfax Corp. being the last to do so in May 2008.
Morgan Stanley and William Blair & Co. LLC are joint book-running managers for the Rosetta Stone offering. Jefferies & Co., Piper Jaffray & Co. and Robert W. Baird & Co. Inc. are co-managers. The underwriters have an overallotment option of 937,500 shares. Fulbright & Jaworski LLP's Brian Fenske is issuer's counsel Cooley Godward Kronish LLP's Brent Siler is underwriters' counsel.
"As a provider of educational software, Rosetta Stone is more resilient to economic slumps than many other software firms," Morningstar analyst Brady Lemos said in a note Wednesday. The note said 20% of sales come from institutional customers, making for somewhat more reliable revenue streams. However, the company's long-term prospects, Lemos said, "hinge on its ability to adapt to competitive threats and consumer tastes."
Rosetta Stone, which sells software, online resources and practice tools for learning 31 languages, marks the second offering this week and the fourth this year.
On Wednesday, San Diego-based online college Bridgepoint Education Inc. debuted on the NYSE, opening at $10.50 per share, its IPO price, which fell below its expected $14 to $16 range. Shares ended trade Wednesday at $11.10.
In the other debuts this year, Chinese online video game company Changyou.com Ltd., a spinoff of Web portal Sohu.com Inc., staged its IPO on the Nasdaq two weeks ago and Mead Johnson Nutrition Co., Bristol-Myers Squibb Co.'s infant formula division, went public on the NYSE in February. Both companies priced at the top of their respective ranges.
Ebay To Acquire Gmarket For $1.2B
Online auction company eBay Inc. announced late Wednesday, April 15, that it will pay up to $1.2 billion to buy South Korean rival Gmarket Inc. in a bid to expand its Asian operations.
The purchase price will be up to $1.2 billion if all outstanding shares are tendered. EBay said it has already secured agreements to purchase at least 67% of the Gmarket's shares
from investors including Yahoo! Inc. and Interpark Corp. and will make a general offer of $24 per share for the balance of the shares.
The price represents a 20% premium to Gmarket's closing price of $19.96 on Wednesday.
Gmarket will be combined with EBay's Seoul-based unit Internet Auction Co., more than doubling the U.S. company's South Korean sales and building a platform for expansion in Asia.
"This deal creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to serve complementary consumer segments," eBay chief executive John Donahoe said in a statement.
Yahoo! said in a separate statement it agreed to sell its 10% stake in Gmarket and will continue to maintain its other operations in South Korea following the sale. Yahoo! purchased its stake in Gmarket in June 2006 from venture capital firm Oak Investment Partners for $60 million.
In addition to Yahoo!, South Korea's Interpark and its chairman, Ki Hyung Lee have also accepted the tender offer, eBay said. Interpark and Lee together hold around 34% of Gmarket's shares.
Interpark noted that it will sell its 14.6 million shares of Gmarket to eBay for $350 million. The acquisition bid has also won the backing of Gmarket CEO and President Young Bae Ku, the company said.
Interpark said in a statement it plans to focus on its existing online retail business and invest in new operations.
South Korea is one of the world's most connected societies and eBay wants to consolidate its position there. During 2008, Gmarket earned revenue of $220.8 million, compared to $161.2 million earned by Internet Auction Company. EBay acquired IAC in 2001.
Gmarket's board of directors has voted unanimously to approve the deal and is recommending that Gmarket security holders accept the offer. Cowen and Company LLC provided the board and a special committee with a fairness opinion, according to a regulatory filing with the Securities and Exchange Commission. The filing also noted that no other financial advisers or investment bankers were involved in the transaction.
San Jose, Calif.-based eBay expects to close the deal during the second quarter pending the tender of a majority of the outstanding shares and American depositary shares of Gmarket on a fully diluted basis and final Korean antitrust approval.
EBay's bid for Gmarket follows the announcement it will spin off its telephony unit Skype to refocus its efforts on its core e-commerce and online payment businesses. EBay plans to take Skype public in an initial public offering next year, but has not revealed the timing of the deal.
The purchase price will be up to $1.2 billion if all outstanding shares are tendered. EBay said it has already secured agreements to purchase at least 67% of the Gmarket's shares
from investors including Yahoo! Inc. and Interpark Corp. and will make a general offer of $24 per share for the balance of the shares.
The price represents a 20% premium to Gmarket's closing price of $19.96 on Wednesday.
Gmarket will be combined with EBay's Seoul-based unit Internet Auction Co., more than doubling the U.S. company's South Korean sales and building a platform for expansion in Asia.
"This deal creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to serve complementary consumer segments," eBay chief executive John Donahoe said in a statement.
Yahoo! said in a separate statement it agreed to sell its 10% stake in Gmarket and will continue to maintain its other operations in South Korea following the sale. Yahoo! purchased its stake in Gmarket in June 2006 from venture capital firm Oak Investment Partners for $60 million.
In addition to Yahoo!, South Korea's Interpark and its chairman, Ki Hyung Lee have also accepted the tender offer, eBay said. Interpark and Lee together hold around 34% of Gmarket's shares.
Interpark noted that it will sell its 14.6 million shares of Gmarket to eBay for $350 million. The acquisition bid has also won the backing of Gmarket CEO and President Young Bae Ku, the company said.
Interpark said in a statement it plans to focus on its existing online retail business and invest in new operations.
South Korea is one of the world's most connected societies and eBay wants to consolidate its position there. During 2008, Gmarket earned revenue of $220.8 million, compared to $161.2 million earned by Internet Auction Company. EBay acquired IAC in 2001.
Gmarket's board of directors has voted unanimously to approve the deal and is recommending that Gmarket security holders accept the offer. Cowen and Company LLC provided the board and a special committee with a fairness opinion, according to a regulatory filing with the Securities and Exchange Commission. The filing also noted that no other financial advisers or investment bankers were involved in the transaction.
San Jose, Calif.-based eBay expects to close the deal during the second quarter pending the tender of a majority of the outstanding shares and American depositary shares of Gmarket on a fully diluted basis and final Korean antitrust approval.
EBay's bid for Gmarket follows the announcement it will spin off its telephony unit Skype to refocus its efforts on its core e-commerce and online payment businesses. EBay plans to take Skype public in an initial public offering next year, but has not revealed the timing of the deal.
Wednesday, April 15, 2009
Ecce Pannis Acquired By Campbell Soup Co
Silver Ventures Inc., the private equity firm run by billionaire Christopher Goldsbury, has agreed to sell Ecce Panis Inc. to Campbell Soup Co. for undisclosed terms.
The target, an artisan bread maker, will be folded into Campbell's Pepperidge Farm division.
Ecce Panis of East Brunswick, N.J., was founded in 1988. It currently has 115 employees and a 113,000-square-foot bakery facility. Campbell does not expect the acquisition to impact its 2009 earnings but expects it to be slightly accretive in 2010.
According to research by investment banking boutique Prestwick Partners LLC, the size of the niche market for artisan breads in the U.S. is about $150 million in annual sales and growing 20% annually, with Ecce Panis one of the four largest companies in the sector. The others are Concept 2 Bakers, La Brea Bakery, a subsidiary of Ireland's IAWS Group plc, and Grace Baking, a subsidiary of Canada's Maple Leaf Foods Inc.
Ecce Panis' previous owner was Phil Columbo, who sold the company earlier this decade.
Campbell and Goldsbury have done deals with each other before. In 1996, Goldsbury sold Pace Salsa Co. to Campbell for $1.1 billion. Goldsbury is believed to maintain stakes in Desert Glory Ltd. and Bay Valley Foods LLC. Silver Ventures sold Discovery Foods LLC to VIP Sales Co. in November 2006 for undisclosed terms.
Calls to the firm were not immediately returned.
Campbell is continuing to focus on its core categories of simple meals (including soup and breads), health beverages and baked snacks.
"One of our seven business strategies is to grow our business through outside partnerships and acquisitions," Campbell spokesman Anthony Sanzio wrote in an e-mail.
The Camden, N.J., food and beverage conglomerate has been taking steps to accomplish the latter. In July, it acquired the Wolfgang Puck Worldwide Inc. soup business from Country Gourmet Foods Inc. for undisclosed terms. About a month later, it sold its Generale Condimentaire sauce business to France's Lesieur International for an undisclosed price.
The company reported $233 million in net earnings for the fiscal quarter ended Feb. 1, compared to $274 million for the same time period one year ago.
"Artisan bread represents one of the fastest growing segments of the bakery category," CEO Douglas Conant said in a statement. "I am confident that we can leverage our sales and marketing capabilities to expand the availability of Ecce Panis products and complement our existing bakery business."
Shares of Campbell closed at $27.43 on Friday, after closing at $27.91 on Thursday, with its market cap around $9.7 billion.
Lincoln International LLC served as Ecce's financial adviser, and Fulbright & Jaworski LLP was its legal counsel.
Davis Polk & Wardwell was Campbell's legal adviser
The target, an artisan bread maker, will be folded into Campbell's Pepperidge Farm division.
Ecce Panis of East Brunswick, N.J., was founded in 1988. It currently has 115 employees and a 113,000-square-foot bakery facility. Campbell does not expect the acquisition to impact its 2009 earnings but expects it to be slightly accretive in 2010.
According to research by investment banking boutique Prestwick Partners LLC, the size of the niche market for artisan breads in the U.S. is about $150 million in annual sales and growing 20% annually, with Ecce Panis one of the four largest companies in the sector. The others are Concept 2 Bakers, La Brea Bakery, a subsidiary of Ireland's IAWS Group plc, and Grace Baking, a subsidiary of Canada's Maple Leaf Foods Inc.
Ecce Panis' previous owner was Phil Columbo, who sold the company earlier this decade.
Campbell and Goldsbury have done deals with each other before. In 1996, Goldsbury sold Pace Salsa Co. to Campbell for $1.1 billion. Goldsbury is believed to maintain stakes in Desert Glory Ltd. and Bay Valley Foods LLC. Silver Ventures sold Discovery Foods LLC to VIP Sales Co. in November 2006 for undisclosed terms.
Calls to the firm were not immediately returned.
Campbell is continuing to focus on its core categories of simple meals (including soup and breads), health beverages and baked snacks.
"One of our seven business strategies is to grow our business through outside partnerships and acquisitions," Campbell spokesman Anthony Sanzio wrote in an e-mail.
The Camden, N.J., food and beverage conglomerate has been taking steps to accomplish the latter. In July, it acquired the Wolfgang Puck Worldwide Inc. soup business from Country Gourmet Foods Inc. for undisclosed terms. About a month later, it sold its Generale Condimentaire sauce business to France's Lesieur International for an undisclosed price.
The company reported $233 million in net earnings for the fiscal quarter ended Feb. 1, compared to $274 million for the same time period one year ago.
"Artisan bread represents one of the fastest growing segments of the bakery category," CEO Douglas Conant said in a statement. "I am confident that we can leverage our sales and marketing capabilities to expand the availability of Ecce Panis products and complement our existing bakery business."
Shares of Campbell closed at $27.43 on Friday, after closing at $27.91 on Thursday, with its market cap around $9.7 billion.
Lincoln International LLC served as Ecce's financial adviser, and Fulbright & Jaworski LLP was its legal counsel.
Davis Polk & Wardwell was Campbell's legal adviser
Plains All American Prices $250M Note Offering
Pipeline operator Plains All American Pipeline LP (PAA.N), on Wednesday sold $350 million of 10-year notes, said IFR, a Thomson Reuters service. The size of the deal was increased from an originally planned $250 million. Bank of America, JP Morgan, BNP Paribas and Wachovia were the joint bookrunning managers for the sale.
CC Holdings Plans To Sell $1.1B Sr Note Offering
CC Holdings, Crown Castle GS III is planning to sell $1.1 billion in 8-year senior secured notes on Wednesday, said a market source familiar with the transaction.
The sole lead manager on the offering is Morgan Stanley.
The sole lead manager on the offering is Morgan Stanley.
HCA Prices $1.5B Senior Note Offering
HCA Inc on Wednesday sold $1.5 billion in 10-year senior secured first lien notes, said a market source familiar with the sale.
The 8.5 percent notes were priced at 96.755 to yield 9 percent or 624 basis points over U.S. Treasuries.
The offering was increased in size on Tuesday from an initially planned $500 million.
The joint book managers on the sale were Citigroup Global Markets, Banc of America, JP Morgan, Deutsche Bank and Goldman Sachs
The 8.5 percent notes were priced at 96.755 to yield 9 percent or 624 basis points over U.S. Treasuries.
The offering was increased in size on Tuesday from an initially planned $500 million.
The joint book managers on the sale were Citigroup Global Markets, Banc of America, JP Morgan, Deutsche Bank and Goldman Sachs
Daylight Resources Trust Announces $125M Offering
Canada's Daylight Resources Trust (DAY_u.TO) said it plans to raise C$125 million ($102.8 million) by selling 17.8 million trust units to a syndicate of underwriters co-led by GMP Securities and CIBC World Markets Inc.
The company will sell its units at C$7 per unit, a discount of nearly 9 percent to its Tuesday closing of C$7.67 on the Toronto Stock Exchange.
Daylight will used part of the proceeds from the offering to repay debt, the company said in a statement.
The underwriters have an overallotment option to purchase up to an additional 2.6 million trust units at the same offering price, it said.
The offering is expected to close on or about May 7.
The company will sell its units at C$7 per unit, a discount of nearly 9 percent to its Tuesday closing of C$7.67 on the Toronto Stock Exchange.
Daylight will used part of the proceeds from the offering to repay debt, the company said in a statement.
The underwriters have an overallotment option to purchase up to an additional 2.6 million trust units at the same offering price, it said.
The offering is expected to close on or about May 7.
Tuesday, April 14, 2009
Rio Tinto Finance Prices $3.5B Notes In 2 Tranches
Rio Tinto Finance (USA) Ltd, an arm of
mining giant Rio Tinto (RIO.AX) (RIO.L), on Tuesday sold $3.5
billion of notes in two parts, said IFR, a Thomson Reuters
service. Deutsche Bank, JP Morgan and Morgan Stanley were the active
joint bookrunning managers, and RBS, Credit Suisse and Societe
Generale were the passive joint bookrunning managers for the
sale.
mining giant Rio Tinto (RIO.AX) (RIO.L), on Tuesday sold $3.5
billion of notes in two parts, said IFR, a Thomson Reuters
service. Deutsche Bank, JP Morgan and Morgan Stanley were the active
joint bookrunning managers, and RBS, Credit Suisse and Societe
Generale were the passive joint bookrunning managers for the
sale.
Bridgepoint IPO Prices At $141.75M
Bridgepoint Education Inc's BPI.N initial public offering priced at $10.50 per share, below its estimated range of $14 to $16, a source with knowledge of the deal said on Tuesday.
Bridgepoint, a San Diego-based operator of online and campus universities, sold 13.5 million shares, raising $141.75 million, the source said. The company had estimated its IPO could raise as much as $216 million.
About 81 percent of the shares sold were held by private equity firm Warburg Pincus.
The underwriters, led by Credit Suisse (CSGN.VX) and JP Morgan (JPM.N), have the option to buy up to 2.025 million shares additional shares to cover over-allotments.
The company plans to list on the New York Stock Exchange under the symbol "BPI" and begin trading Wednesday
Bridgepoint, a San Diego-based operator of online and campus universities, sold 13.5 million shares, raising $141.75 million, the source said. The company had estimated its IPO could raise as much as $216 million.
About 81 percent of the shares sold were held by private equity firm Warburg Pincus.
The underwriters, led by Credit Suisse (CSGN.VX) and JP Morgan (JPM.N), have the option to buy up to 2.025 million shares additional shares to cover over-allotments.
The company plans to list on the New York Stock Exchange under the symbol "BPI" and begin trading Wednesday
Pamplona Acquires TMD Friction For 100M EUR
Pamplona Capital Management, a UK private equity firm, acquired the German brake friction materials manufacturer TMD Friction in a secondary management buyout transaction valued at 100 million EUR. KPMG advised Pamplona while, Close Brothers Group advised TMD Friction.
Accor Acquires 15% Stake of Lucien Barriere for 153M Eur
Accor has acquired a 15% stake in Group Lucien Barriere, the French hotel and casino operator, for 153 million EUR. Accor was advised by Goldman Sacdhs; SG, BNP Paribas, Lazard and CIBC World Markets.
Gazprom Acquires 20% Stake of Gazprom Neft
Gazprom has exercised its option to acquire a 20% stake in Gazprom Neft, the Russian oil producer, for $4.1 billion. Citigroup has advised Gazprom, Deutsche Bank has advised GazpromNeft.
Rosetta Stone, Bridgepoint Education Set to IPO
Two IPOs with different spins on the education market are set to make their debut in the U.S. this week, with deals from Rosetta Stone Inc. and Bridgepoint Education Inc. creating the busiest period for new stocks since August.
Morgan Stanley and William Blair lead underwrote the Rosetta Stone IPO. Credit Suisse and JPMorgan joint were lead underwriters for Bridgepoint Education
Rosetta Stone, which makes self-study foreign-language software, aims to raise as much as $106 million in its initial public offering of stock, while online college Bridgepoint seeks $216 million. Both are scheduled to list on the New York Stock Exchange, with Rosetta trading under the symbol RST and Bridgepoint under BPI.
Both companies are young, technology-centered and fast-growing. Their business models also include a key revenue driver that any tech investor looks for: scalability, or the ability to add new customers at low cost.
For Bridgepoint, it is less expensive to enroll new online students than in a traditional classroom-based setting, thanks to little bricks-and-mortar overhead and a faculty that is skewed primarily to part-time adjuncts.
Lower costs allow the college to "price its courses attractively, so it can grow its student base quickly," says Richard Birge, a Morningstar stock analyst.
For Rosetta, the fact that its language courses don't rely on translation means that the software can be expanded to different countries with minor alteration; most sales are made directly through its call centers and Web sites, limiting expense.
Rosetta has gained visibility through an advertising blitz and its kiosks in airports and malls. Revenue rose by 52% and earnings were up fivefold in 2008 to $13.9 million. A weaker economy and slower airport and mall traffic could affect its results, but it still delivered a strong fourth quarter in 2008.
The company is gearing up for more expansion both domestically and internationally; only 5% of its sales in 2008 were generated outside of the U.S. "There's plenty of market share that's up for grabs," says Morningstar analyst Brady Lemos.
Bridgepoint Education, which has two small traditional college campuses and 98% of its students attending exclusively online, generated more than twice the revenue and eight times the earnings in 2008 versus 2007, ending the year with $26.4 million in profits. It has more students, faster enrollment growth and a higher operating profit margin, at 15%, than the last online college that went public, Grand Canyon Education Inc.
Morgan Stanley and William Blair lead underwrote the Rosetta Stone IPO. Credit Suisse and JPMorgan joint were lead underwriters for Bridgepoint Education
Rosetta Stone, which makes self-study foreign-language software, aims to raise as much as $106 million in its initial public offering of stock, while online college Bridgepoint seeks $216 million. Both are scheduled to list on the New York Stock Exchange, with Rosetta trading under the symbol RST and Bridgepoint under BPI.
Both companies are young, technology-centered and fast-growing. Their business models also include a key revenue driver that any tech investor looks for: scalability, or the ability to add new customers at low cost.
For Bridgepoint, it is less expensive to enroll new online students than in a traditional classroom-based setting, thanks to little bricks-and-mortar overhead and a faculty that is skewed primarily to part-time adjuncts.
Lower costs allow the college to "price its courses attractively, so it can grow its student base quickly," says Richard Birge, a Morningstar stock analyst.
For Rosetta, the fact that its language courses don't rely on translation means that the software can be expanded to different countries with minor alteration; most sales are made directly through its call centers and Web sites, limiting expense.
Rosetta has gained visibility through an advertising blitz and its kiosks in airports and malls. Revenue rose by 52% and earnings were up fivefold in 2008 to $13.9 million. A weaker economy and slower airport and mall traffic could affect its results, but it still delivered a strong fourth quarter in 2008.
The company is gearing up for more expansion both domestically and internationally; only 5% of its sales in 2008 were generated outside of the U.S. "There's plenty of market share that's up for grabs," says Morningstar analyst Brady Lemos.
Bridgepoint Education, which has two small traditional college campuses and 98% of its students attending exclusively online, generated more than twice the revenue and eight times the earnings in 2008 versus 2007, ending the year with $26.4 million in profits. It has more students, faster enrollment growth and a higher operating profit margin, at 15%, than the last online college that went public, Grand Canyon Education Inc.
Monday, April 13, 2009
Polaroid Seeks Better Bid From Hilco/Gordon Bros.
Bankrupt instant camera company Polaroid Corp. has sought court approval for a sale to a joint venture between two liquidators, which betters a competing bid from Patriarch Partners LLC, according to a Bloomberg News report Thursday, April 9. The Minnetonka, Minn.-based company in a filing with the U.S. Bankruptcy Court for the District of Minnesota in Minneapolis asked for court approval on a bid from a JV between liquidation firms Hilco Consumer Capital LP of Toronto and Boston's Gordon Brothers Brands LLC, which values its assets at $72.6 million, Bloomberg News said.
Days earlier, Judge Gregory Kishel tossed out a $59.1 million bid won March 31 by New York private equity firm Patriarch Partners LLC on creditor disagreements over the auction process and the winning bid price, and asked for new offers. The Hilco-Gordon bid breaks down to $40 million in cash plus a stake valued at $16.2 million in the restructured Polaroid, Bloomberg News reported, citing the Polaroid filing. Other assets not included in the proposed deal are valued at $16.4 million, valuing the company at $72.6 million total.
The Deal reported previously that the earlier Patriarch bid consisted of $44.85 million in cash and an equity component of nonvoting stock in the restructured Polaroid worth nearly $7.8 million, or a stake of about 12%. That bid also excluded certain assets that were to be retained by the estate. Stalking-horse bidder PHC Acquisitions LLC, an affiliate of Luxembourg private equity firm Genii Capital, is entitled to a breakup fee of $1.2 million and $500,000 in reimbursement expenses, according to Polaroid.
Polaroid filed for bankruptcy Dec. 18, done in by problems surrounding its owner, Petters Group Worldwide LLC. Petters Group itself filed for bankruptcy on Oct. 11, little more than a week after chief executive Tom Petters was arrested on fraud charges and other allegations. Polaroid's bankruptcy is its second attempt at a restructuring. The company filed for Chapter 11 in October 2001. Attorneys from Lindquist & Vennum PLLP are counsel to Polaroid. Houlihan, Lokey, Howard & Zukin Inc. gave Polaroid financial advice. "
Days earlier, Judge Gregory Kishel tossed out a $59.1 million bid won March 31 by New York private equity firm Patriarch Partners LLC on creditor disagreements over the auction process and the winning bid price, and asked for new offers. The Hilco-Gordon bid breaks down to $40 million in cash plus a stake valued at $16.2 million in the restructured Polaroid, Bloomberg News reported, citing the Polaroid filing. Other assets not included in the proposed deal are valued at $16.4 million, valuing the company at $72.6 million total.
The Deal reported previously that the earlier Patriarch bid consisted of $44.85 million in cash and an equity component of nonvoting stock in the restructured Polaroid worth nearly $7.8 million, or a stake of about 12%. That bid also excluded certain assets that were to be retained by the estate. Stalking-horse bidder PHC Acquisitions LLC, an affiliate of Luxembourg private equity firm Genii Capital, is entitled to a breakup fee of $1.2 million and $500,000 in reimbursement expenses, according to Polaroid.
Polaroid filed for bankruptcy Dec. 18, done in by problems surrounding its owner, Petters Group Worldwide LLC. Petters Group itself filed for bankruptcy on Oct. 11, little more than a week after chief executive Tom Petters was arrested on fraud charges and other allegations. Polaroid's bankruptcy is its second attempt at a restructuring. The company filed for Chapter 11 in October 2001. Attorneys from Lindquist & Vennum PLLP are counsel to Polaroid. Houlihan, Lokey, Howard & Zukin Inc. gave Polaroid financial advice. "
ExpressScripts Buys WellPoint for $4.7B
Express Scripts Inc. stands to gain considerable negotiating clout from its $4.68 billion deal to buy the pharmacy benefits management businesses of health insurer WellPoint Inc., and experts say that could mean savings for customers buying prescription drugs.
St. Louis-based Express Scripts said Monday it planned to buy WellPoint's NextRx subsidiaries in a cash-and-stock deal. Express Scripts is the third-largest pharmacy benefits manager, and the deal likely would vault it past No. 2 CVS Caremark and push it close to the top stand-alone company, Medco Health Solutions Inc., based on prescriptions managed.
The increased bargaining power that comes from that size should translate into better pricing for existing employer customers and more aggressive pricing for prospective new ones, said David Dross, a principal with the human resources consulting firm Mercer.
That could help employees by lowering copayments for drugs or softening increases in the contributions they have to make to their health plans. But Dross said that depends on how or if the employer passes along any savings.
Pharmacy benefits managers pay prescription drug claims through large networks of chain pharmacies and independent drug stores. They also manage mail-order businesses that ship drugs directly to patients, a practice that is becoming popular for people who need steady medications to deal with chronic conditions.
Shares of both Express Scripts and WellPoint climbed steeply Monday after the deal was announced, as several analysts said they saw positives for both companies.
WellPoint will receive at least $3.28 billion in cash and the balance in Express Scripts stock. The insurer will use about $2 billion of that to buy back shares.
"The expected share buyback program reflects our belief that our stock is undervalued based on the company's fundamentally strong financial position, including predictable earnings, including predicable earnings with strong cash flow from operations," WellPoint Chief Financial Officer Wayne DeVeydt said during a conference call with analysts.
The transaction also includes a 10-year contract for Express Scripts to provide services to WellPoint following closing of the transaction.
The NextRx subsidiaries provide services to about 25 million WellPoint customers. WellPoint executives declined to say how much revenue the business generates, but they did say it represented less 10 percent of the company's total operating profit before taxes.
Investors smiled on the deal. Express Scripts shares rose 15.5 percent, or $7.64, to close at $56.81 Monday. WellPoint stock climbed more than 8 percent, or $3.24, to $43.58.
Deutsche Bank analyst Scott Fidel said in a Monday morning note that investors have never given managed-care organizations much value in their stock prices for pharmacy benefits businesses. He said this deal "should help unlock some value for (WellPoint's) stock."
Express Scripts could grow from about 500 million annual prescriptions filled to as many as 750 million, noted Arthur Henderson, an analyst with Jefferies & Co.
"That's a huge amount of purchasing leverage that can benefit your entire book of business," he said.
Analysts also say Express Scripts should increase the percentage of NextRx business delivered through the mail. That cuts out retail pharmacy costs like dispensing fees and improves the management of chronic conditions.
Express Scripts has been "fantastic" at moving patients from branded medications to less-expensive generic versions, said Tony Perkins, who covers the company with First Analysis Securities Corp. He expects the company to apply that skill to its new customers from WellPoint.
Henderson said the generic conversions will help employers as well as the employees on a company-sponsored health plan.
"You save money and then your employer saves money because they're not having to spend the amount that's prestipulated for that branded medication," he said. "This (deal) really makes sense."
During the fourth quarter of 2008, generic drug use rose to 67.3 percent from 63.7 percent for Express Scripts. In 2008, profit rose nearly 37 percent.
Express Scripts expects the deal to produce $1 billion in annual earnings before interest, taxes, depreciation and amortization. The company will use cash on hand, debt financing and up to $1.4 billion in stock to pay for the deal, said David Myers, vice president of investor relations.
The companies expect it to close in the second half of 2009.
The main financial adviser to Express Scripts was Citigroup Inc. with help from Credit Suisse Group and J.P. Morgan Chase & Co.
St. Louis-based Express Scripts said Monday it planned to buy WellPoint's NextRx subsidiaries in a cash-and-stock deal. Express Scripts is the third-largest pharmacy benefits manager, and the deal likely would vault it past No. 2 CVS Caremark and push it close to the top stand-alone company, Medco Health Solutions Inc., based on prescriptions managed.
The increased bargaining power that comes from that size should translate into better pricing for existing employer customers and more aggressive pricing for prospective new ones, said David Dross, a principal with the human resources consulting firm Mercer.
That could help employees by lowering copayments for drugs or softening increases in the contributions they have to make to their health plans. But Dross said that depends on how or if the employer passes along any savings.
Pharmacy benefits managers pay prescription drug claims through large networks of chain pharmacies and independent drug stores. They also manage mail-order businesses that ship drugs directly to patients, a practice that is becoming popular for people who need steady medications to deal with chronic conditions.
Shares of both Express Scripts and WellPoint climbed steeply Monday after the deal was announced, as several analysts said they saw positives for both companies.
WellPoint will receive at least $3.28 billion in cash and the balance in Express Scripts stock. The insurer will use about $2 billion of that to buy back shares.
"The expected share buyback program reflects our belief that our stock is undervalued based on the company's fundamentally strong financial position, including predictable earnings, including predicable earnings with strong cash flow from operations," WellPoint Chief Financial Officer Wayne DeVeydt said during a conference call with analysts.
The transaction also includes a 10-year contract for Express Scripts to provide services to WellPoint following closing of the transaction.
The NextRx subsidiaries provide services to about 25 million WellPoint customers. WellPoint executives declined to say how much revenue the business generates, but they did say it represented less 10 percent of the company's total operating profit before taxes.
Investors smiled on the deal. Express Scripts shares rose 15.5 percent, or $7.64, to close at $56.81 Monday. WellPoint stock climbed more than 8 percent, or $3.24, to $43.58.
Deutsche Bank analyst Scott Fidel said in a Monday morning note that investors have never given managed-care organizations much value in their stock prices for pharmacy benefits businesses. He said this deal "should help unlock some value for (WellPoint's) stock."
Express Scripts could grow from about 500 million annual prescriptions filled to as many as 750 million, noted Arthur Henderson, an analyst with Jefferies & Co.
"That's a huge amount of purchasing leverage that can benefit your entire book of business," he said.
Analysts also say Express Scripts should increase the percentage of NextRx business delivered through the mail. That cuts out retail pharmacy costs like dispensing fees and improves the management of chronic conditions.
Express Scripts has been "fantastic" at moving patients from branded medications to less-expensive generic versions, said Tony Perkins, who covers the company with First Analysis Securities Corp. He expects the company to apply that skill to its new customers from WellPoint.
Henderson said the generic conversions will help employers as well as the employees on a company-sponsored health plan.
"You save money and then your employer saves money because they're not having to spend the amount that's prestipulated for that branded medication," he said. "This (deal) really makes sense."
During the fourth quarter of 2008, generic drug use rose to 67.3 percent from 63.7 percent for Express Scripts. In 2008, profit rose nearly 37 percent.
Express Scripts expects the deal to produce $1 billion in annual earnings before interest, taxes, depreciation and amortization. The company will use cash on hand, debt financing and up to $1.4 billion in stock to pay for the deal, said David Myers, vice president of investor relations.
The companies expect it to close in the second half of 2009.
The main financial adviser to Express Scripts was Citigroup Inc. with help from Credit Suisse Group and J.P. Morgan Chase & Co.
Portland General Elec Prices $300 M Bonds
Oregon's Portland General Electric Co(POR.N) on Monday sold $300 million in 10-year first mortgagebonds, said IFR, a Thomson Reuters service. The size of the deal was increased from an originally planned $250 million. Deutsche Bank and Wachovia were the joint bookrunning
managers for the sale.
managers for the sale.
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